December 21, 2017

Saudi Arabia: Expat Fee Obliges 62,000 Aliens to Leave



Since the introduction of expat levy – the total number of foreign workers in Saudi Arabia has additionally been reduced by 61,483 at the end of the second quarter of 2017, according General Authority of Statistics (GAStat) Saudi Arabia.

A total of 10.789 million of expatriate workers are currently working in the kingdom.

For dependents, the expat levy was enforced in July this year at the rate of SR100 per dependent per month and was suggested to scale up gradually to SR200 in 2018, SR300 in 2019, and SR400 in 2020.

And for companies where expatriates and Saudi workers are in equal numbers – per month tariff per worker will be SR300 from January 2018 which further increase to SR500 and SR700 in 2019 and 2020.

Striking more tolls on the companies where expat workers outnumber Saudis – the expat fee will be SR400 per month per worker from January 2018 and will ascend to SR600 and SR800 in 2019 and 2020.

Saudi government is expecting to collect SR24 billion ($6.2 billion) from this excises on foreign workers in 2018. In 2019 and 2020, the government expects to collect another SR44 billion ($11.7 billion) and SR65 billion ($17.3 billion) respectively.

Value-added tax (VAT) at the rate of 5% has also been imposed in the budget on companies with an annual turnover of SR1 million ($266,640) from January 1, 2018. However the levy will not be applicable on expat remittances.

After oil glut in the international market, Saudi regime is taking austere measures to slash its reliance on oil revenues to 42% by 2023 – which made up around 90% of the total country’s revenues in 2014.

For the fiscal year, the kingdom is expecting oil revenue to rise to SR492 billion from SR440 billion and non-oil revenues against ongoing to SR291 billion from estimated SR256 billion in current year.

The news flashed the kingdom announcement of the largest-ever SR978 billion ($261 billion) budget for the fiscal year 2018 (1439-1440 AH) – forecasting a deficit of SR195 billion ($58 billion) and a deficit of SR195 billion (8.9% of GDP).

Gold and jewelry shops employing foreigners after December 3 will also be obliged to pay a fine of SR20,000 for each foreign worker. There are more than 6,000 gold and jewelry shops in the country that employ 25,000 workers including aliens.

Saudi Arabia is striving to cut the climbing unemployment rate among Saudis to 9% by 2020 and 7% by 2030 from existing 12.8%. The kingdom plans to provide 1.2 million jobs to Saudis which are currently occupied by the emigrants.