Saudi Arabia reviewing fees on expat workers amid record unemployment

Pedro Gonçalves
Saudi Arabia reviewing fees on expat workers amid record unemployment

Saudi Arabia is reportedly reviewing its policy of imposing fees on expatriate workers following an exodus of foreign workers amid rising living costs, according to Bloomberg.

The system will likely be modified or restructured rather than entirely repealed, sources familiar with the matter said, with a final decision on the matter expected to be made public within the next few weeks. 

In an emailed response to a query by Bloomberg, however, Saudi Arabia's minister of media, Awwad AlAwwad, denied that a review of the fee is taking place.

Expatriate fees were introduced in 2016 as part of Crown Prince Mohammed bin Salman's ambitious drive to overhaul Saudi Arabia's economy. The fees, however, have proven unpopular among business owners who have been hit by the exodus of hundreds of thousands of foreign workers who had provided cheap labour.

The aim of the review is to reconcile the government's fiscal needs with the ability of the private sector to hire and grow, one of the people said. 

ince 2017, expat workers have been required to pay a fee for each dependent member of the family. The fee, which started at 100 riyals ($27) a month per dependent, is scheduled to increase by 100 riyals each year. Businesses that employ foreign workers are also subject to fees as part of the country's 'Saudisation' drive to fill jobs with locals.

According to Bloomberg, despite the mass departure of foreign workers, Saudi unemployment has reached its highest level in a decade at 12.9%.

Saudi businesses have complained that locals are not interested in "low-status" jobs, "creating a real problem for the economy", according to a report by Business Insider published earlier this year.