Saudi Arabia Introduces ‘Expat Levy' on Expats Including Indians

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The economic sentiment of Saudi Arabia has been hurt with the declining crude oil prices and the country which is  primarily an oil producing nation resorted to borrowing in the recent history only last year. To tackle the crisis, the country is coming up with a way out. And in the recent budget announcement, the government of Saudi Arabia had confirmed the introduction of expat levy from 2017 with charges to the tune of SR800 (Saudi Riyal) to be phased in by the year 2020.

Saudi Arabia Introduces ‘Expat Levy' on Expats Including Indians

From coming July, each of the dependent of Indian expat in Saudi Arabia shall have to shell out SR100 or Rs. 1700 and the amount shall be increased every year until 2020. The increase in the expat levy will be made in order to promote more hiring of the local workforce.

As quoted by Atul Surana, CFP, "Companies currently pay a levy of SR200 per month per expat employee, but only for expat employees that exceed the number of Saudi employees. But that will be gradually increased from next year, the government's "Fiscal Balance Program - Balanced Budget 2020" document shows".

In accordance with the Saudi government statement, currently neither the Saudi nationals nor the expatriate workforce pays income tax and the policy shall remain as such. As reported to the reports in Riyadh, the expat levy shall apply only to those employees working with commercial establishments and not on domestic helpers.

One of the ministers is also quoted saying in a leading business dailies report "There are two kinds of fees, the first is according to the number of family members an expat has in return for utilities used... this minimal amount will increase gradually every year". "The second is already imposed on companies which employ expat workers; this will increase gradually as well until 2020."

Further, for such companies who do not have expats employees more than the Saudi or GCC employees will not be waived of the fees but charges shall apply at a discounted rate.

From July 2017, a fee shall apply on each of the dependent of the expat worker. The step is aimed at reducing the impact on families whose children are enrolled in school.

GoodReturns.in

Story first published: Thursday, June 22, 2017, 10:33 [IST]
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