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Is Saudi Vision 20 30 Saudization gone mad
| Published: | 20 Nov at 6 PM |
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Saudi Arabia holds an estimated 10 million expats, 100,000 of whom are citizens of Western countries and all of whom are likely to be affected by the new rules.
Since the release of Crown Prince Mohammad bin Salman’s plan for the future of the kingdom was released, a number of changes have taken place, the majority of which are making life as an expat professional more difficult than ever before. As part of Saudi Vision 2030, new laws have been introduced in an attempt to reduce the kingdom’s dependence on foreign workers. Two newly-introduced statues having a negative effect on expat lives at present are the downgrading of work visa durations from two to one year and the controversial ‘expat tax’.
The stated aims of Vision30 are to develop the public sector, strengthen an economy hard hit by the fall in oil revenues and increase the numbers of tourists to the region. Foreign nationals and expat professionals happy to live and work long-term in the kingdom believe they’re being made scapegoats rather than being encouraged to continue benefiting the country.
For example, the reduction of work visa durations was justified as ‘necessary in order to improve employment market efficiency’, and applies specifically to middle to low income workers who, it seems, will be replaced by local labour. The effect on wealthy expat households as regards losing staff who are, in many cases, able to speak reasonable English, hasn’t been considered. Wealthy expat professionals contribute largely to the country’s economic development, a factor which doesn’t seem to have been taken into consideration, and many consider the new law as Saudization gone mad.
The new bill taxing all expat dependents, irrespective of country of origin, religion or race, is another example of the disdain in which foreign workers seem to be held in spite of their contributions to the kingdom. Effective immediately, the monthly tax of 100SAR ($27) has already resulted in an exodus of expat family members in the lower-waged sector and will rise annually to a maximum of 200SAR ($54) per month per dependent. For expats with generational roots in Saudi and large families, it’s devastating.
The tax isn’t just applicable to workers, with employers forced to pay 400SAR monthly for each expat worker employed if foreigners outnumber local employees. Those employing a majority of Saudi workers must still pay 300SAR per month for each expat worker. In 2018, the new tax is expected to net the government some 24 billion SAR - $6 billion US. As yet, no-one has calculated exactly how many Saudi nationals will be needed to make up the losses caused by foreign workers deserting in thier millions, nor estimated locals’ willingness to work, especiallyin menial jobs.
Since the release of Crown Prince Mohammad bin Salman’s plan for the future of the kingdom was released, a number of changes have taken place, the majority of which are making life as an expat professional more difficult than ever before. As part of Saudi Vision 2030, new laws have been introduced in an attempt to reduce the kingdom’s dependence on foreign workers. Two newly-introduced statues having a negative effect on expat lives at present are the downgrading of work visa durations from two to one year and the controversial ‘expat tax’.
The stated aims of Vision30 are to develop the public sector, strengthen an economy hard hit by the fall in oil revenues and increase the numbers of tourists to the region. Foreign nationals and expat professionals happy to live and work long-term in the kingdom believe they’re being made scapegoats rather than being encouraged to continue benefiting the country.
For example, the reduction of work visa durations was justified as ‘necessary in order to improve employment market efficiency’, and applies specifically to middle to low income workers who, it seems, will be replaced by local labour. The effect on wealthy expat households as regards losing staff who are, in many cases, able to speak reasonable English, hasn’t been considered. Wealthy expat professionals contribute largely to the country’s economic development, a factor which doesn’t seem to have been taken into consideration, and many consider the new law as Saudization gone mad.
The new bill taxing all expat dependents, irrespective of country of origin, religion or race, is another example of the disdain in which foreign workers seem to be held in spite of their contributions to the kingdom. Effective immediately, the monthly tax of 100SAR ($27) has already resulted in an exodus of expat family members in the lower-waged sector and will rise annually to a maximum of 200SAR ($54) per month per dependent. For expats with generational roots in Saudi and large families, it’s devastating.
The tax isn’t just applicable to workers, with employers forced to pay 400SAR monthly for each expat worker employed if foreigners outnumber local employees. Those employing a majority of Saudi workers must still pay 300SAR per month for each expat worker. In 2018, the new tax is expected to net the government some 24 billion SAR - $6 billion US. As yet, no-one has calculated exactly how many Saudi nationals will be needed to make up the losses caused by foreign workers deserting in thier millions, nor estimated locals’ willingness to work, especiallyin menial jobs.
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