Saudi’s expat levy fees predicted to generate near US$700m per year

Saudi Arabia is predicted to generate SR2.6bn (US$693.3m) from fees levied on dependents of expatriates working in the kingdom, according to the Directorate of Passports.

According to data released by the National Information Centre, the number of registered dependents reached 2,221,551 this week.

“If fees on each dependent are paid at SR100 (US$27), it will yield SR222m per month, or SR2.665bn per year,” said Khalid Al-Saikhan, assistant director general of the Directorate of Passports, in a press statement on Tuesday.

As reported, there has been confusion in the kingdom as levy commenced on July 1, with many expat workers still not sure how and when the monthly fees for themselves and their dependents, will be deducted from their wages.

However, Al-Saikhan said that banks are beginning to upgrade systems to deal with the collection of the new levy

Commercial banks

“Four Saudi commercial banks are technically ready to deal with the new fees, while the remaining banks will follow suit and upgrade their technical platforms soon in cooperation with the Ministry of Finance and the Saudi Arabian Monetary Authority (SAMA),” Al-Saikhan added.

As reported, the application of the new fees began at the beginning of the current month, but for those who have already renewed their residence permits, they will pay fees for the remaining period of the validity of their residence permits in due course.

For final exit, the two-month validity period will be considered in addition to the duration of the residence permit as per regulations,, without clarifying further.

SR400 (US$108) per month by 2020

The amount is expected to increase every year until 2020, doubling to SR200 (US$54) next year, then rising to SR300 (US$81) in 2019 and SR400 (US$108) in 2020.

“The new fees come as the Kingdom faces pressure to plug its fiscal deficit and boost state revenues amid low oil prices,” said Ibrahim Al-Qayid, founding member of the National Society of Human Rights (NSHR) told local news outlet Arab News on Tuesday.

As reported, in addition to generating revenue for Saudi government, the expat fee is also seen as being part of a wider campaign to encourage the hiring of Saudi workers by national and foreign company in the kingdom. The fees are not being levied on domestic helpers, such as drivers and cleaners, but only on those expatriates who work in commercial entities.

ABOUT THE AUTHOR
Gary Robinson
Deputy Editor, International Investment and Head of Video at Open Door Media Publishing. A fully qualified journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as an IFA.

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