Saudi Arabia’s finance ministry has said there would now be no fees applied on remittances out of the country, just days after the kingdom’s advisory Shura Council said it was looking at a proposal to impose a 6 per cent levy on expat remittances.
In an untypical move, the ministry announced its decision to overlook the Shura Council recommendation via its official Twitter account on Sunday, stating that Saudi Arabia is “committed to the principle of free movement of capital in and out of the kingdom, in line with international standards”.
11.6 million, more than a third of Saudi Arabia’s 30 million inhabitants are estimated to be expats, with many attracted tax free environment and higher pay than they can get at home.
But in a series of recent moves the kingdom has been looking at ways to make more money from the expat community, as it looks to introduce measures to bring in more cash to offset the impact on its economy of lower oil prices globally.
As reported, it announced reform plans last year, which included a proposal to look at imposing income tax on foreign workers, as part of the Saudi deputy crown prince Prince Mohammed bin Salman “National Transformation Plan” 2030 proposals. The income tax plans have since, as reported, been underplayed with officials stating that there are “no immediate plans” for income tax in the kingdom, stating that the moves were simply ‘proposals’.
As reported, the government has also raised the cost of visas and is introducing gradually rising monthly fees on expatriate workers and their dependents.
In its 2017 budget released just before Christmas last year, the kingdom added the provision to levy fees on each dependent of an expat worker as well as the workers themselves.
The rejection of the proposals to add the 6% fees to remittances will provide some relief to millions of expats in Saudi Arabia, particularly those that send money back to families outside of the kingdom. Proposals by the Shura Council are not always adopted, the finance ministry stated, according to local reports.
As reported, the kingdom has already been criticised for its plans to force expats and their dependents to pay levies while living in Saudi Arabia.
There has been a 12.17 percent increase in the number of expatriates, according to the General Authority for Statistics (GAS) third quarter survey for 2016. The number of expats in the kingdom reached 11.6 million by mid 2016 up from 2015’s 10.2 million figure.
Low oil prices
The country has also already introduced a range of initiatives to help close the budget gap created by low oil prices by looking at new including investing in foreign firms, in particular, as reported, technology firms.
The kingdom has also, as reported, even been looking at increasing tourism in the region. Millions flock to Mecca each year for religious reasons and the Saudi government is hoping to capitlatisle on this.