Rumours of the impending introduction a new tax on expatriate salaries in Saudi Arabia have been scotched by government authorities following a building social media campaign on the matter.
According to local reports, the Saudi Ministry of Labor and Social Development has “categorically denied” social media rumors that expat workers will have to pay 10% tax on a monthly salary of more than SR3,000.
“There is no truth in these reports,” the ministry’s spokesman Khaled Aba Al-Khail told local news outlet The Saudi Gazette. “There is no intention at all to impose new tax on expatriates,”
The social media rumour about the tax also claimed that the authorities consisting of the ministries of labor, finance and the Saudi Arabian Monetary Authority (SAMA) were coordinating to impose the tax and suggested that certain jobs would be limited to Saudi nationals only.
“Whatever social media is circulating about the new tax on expatriates is totally untrue,” the spokesman reiterated.
Saudi crown prince
Across the last 18 months Saudi Arabia has been implementing its plans to diversify their sources of income away from oil reserves, with a fleet of new changes being implemented as part of reforms led by Saudi crown prince Mohammed Bin Salman, pictured left, as it bids to diversify away from oil.
As reported, Saudi Arabia joined fellow Gulf Cooperation council member the United Arab Emirates and introduced VAT at 5% on certain goods for the first time in their history on January 1.
Petrol and diesel, food, clothes, utility bills and hotel rooms all now have VAT applied in both Saudi Arabia and the UAE. There are some exemptions from the tax that have been given a zero-tax rating, including medical treatment, financial services and public transport.
The other members of the Gulf Co-operation Council (Bahrain, Kuwait, Oman, and Qatar) have also committed to introduce VAT, though some have delayed plans until at least 2019.