Saudi Arabia denies ‘rumours’ about freezing expat fees

Saudi’s ministry of Labour and Social Development has “categorically denied social media rumours” about plans to keep the expat fees for companies fixed at the initial level, according to local media reports.

In January, Saudi Arabia introduced a monthly fee of SAR400 ($107) on companies for each foreign worker they hire. Firms that employ an equal or greater number of Saudis than expats pay SAR300 ($80).

The monthly fee will increase to SAR500-600 ($133-160) per worker in 2019 and then SAR700-800 ($187-$213) per worker in 2020.

The Council of Saudi Chambers has repeatedly called for changes to the levy, including exempting small and medium enterprises, making payment monthly rather than at visa renewal or issuance and extending the timeline for increases from 2020 to 2025.

However, during a meeting with the National Committee for Contractors in the Council of Saudi Chambers, Saudi’s Minister of Labour and Social Development clarified that the fee system will remain in place, Saudi Gazette reported.

The construction sector in the kingdom has been the hardest hit by the new fee, with thousands of expat workers leaving the country early this year.

Despite complaints from the private sector, Saudi Arabia has no plans revise the new expat fee.

“There are no plans to revise any of the reforms that we have implemented,” he said. “These have been modelled for an extended period of time. We knew what the impact is going to be,” said the kingdom’s finance minister Mohammed Al-Jadaan.

The push by Saudi Crown Prince Mohammed bin Salman to create more jobs for Saudis has backfired as expatriate workers are leaving the kingdom by the thousands and businesses struggle to hire locals. Over 234,000 expat workers lost their jobs in the private and public sectors during the first quarter of 2018 due to the expat fee, as reported by International Investment.

Pedro Gonçalves
Pedro Gonçalves is Financial Correspondent at International Investment.

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