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Expats in Saudi to face levy charges
| Published: | 13 Jun at 6 PM |
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Tagged: Australia
The Saudi Arabian government has announced it will put in place a monthly expatriate levy of 100 riyals, starting on July 1 and increasing year by year until 2020.
The move is said to have been sparked by Saudization plans to encourage local companies to employ nationals rather than expats, and the levy is expected to be deducted from foreign workers’ salaries by employers. Companies continuing to employ more expatriates than Saudi nationals will be forced to pay 400 riyals a month for each expat worker, with the amount due to increase in yearly increments. For 2019, the cost will be 600 riyals, with a further increase in 2020 to 800 riyals. Saudi companies which employ fewer expats than nationals will see the charge reduced by 100 royals per month.
In addition to the individual levies, fees for expat workers’ dependents are also expected to take effect in July at a start rate of 100 riyals per dependent per month. The tax is expected to boost government revenues still suffering from low or fluctuating oil prices, and will be increased each year until 2020, when it will reach 400 riyals per month. The levy will not apply to domestic help or drivers as it will be restricted to the dependents of expats working in commercial companies.
Employers are now warning expat employees this tax will also be debited directly from their wages. In yet another attempt to fill coffers hit hard by the oil price slump, Saudi Arabia has also introduced a VAT-style tax of 100 per cent on cigarettes and energy drinks, with the order becoming law at the end of last week. A further tax on carbonated drinks has been fixed at 50 per cent, and will come into effect later in the year. Saudi is the first GCC country to go ahead with the new-style taxes.
Source: Khaleej Times
The move is said to have been sparked by Saudization plans to encourage local companies to employ nationals rather than expats, and the levy is expected to be deducted from foreign workers’ salaries by employers. Companies continuing to employ more expatriates than Saudi nationals will be forced to pay 400 riyals a month for each expat worker, with the amount due to increase in yearly increments. For 2019, the cost will be 600 riyals, with a further increase in 2020 to 800 riyals. Saudi companies which employ fewer expats than nationals will see the charge reduced by 100 royals per month.
In addition to the individual levies, fees for expat workers’ dependents are also expected to take effect in July at a start rate of 100 riyals per dependent per month. The tax is expected to boost government revenues still suffering from low or fluctuating oil prices, and will be increased each year until 2020, when it will reach 400 riyals per month. The levy will not apply to domestic help or drivers as it will be restricted to the dependents of expats working in commercial companies.
Employers are now warning expat employees this tax will also be debited directly from their wages. In yet another attempt to fill coffers hit hard by the oil price slump, Saudi Arabia has also introduced a VAT-style tax of 100 per cent on cigarettes and energy drinks, with the order becoming law at the end of last week. A further tax on carbonated drinks has been fixed at 50 per cent, and will come into effect later in the year. Saudi is the first GCC country to go ahead with the new-style taxes.
Source: Khaleej Times
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