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Saudi Arabia to start collecting expat levy next month

Expat levy is seen to boost kingdom's revenues amid low oil prices

Image Credit: Reuters
Expatriates working in Saudi Arabia will soon have to pay a levy every month.

Dubai: Starting next month, Saudi Arabia will be collecting a new tax from expatriates and their dependents, a move that is seen to boost the country’s revenues amid weak oil prices.

The new fee, to be implemented from July 1, will be 100 Saudi riyals (Dh97.93) per dependent per month. The amount is expected to increase gradually every year until 2020. By next year, the figure will double to 200 Saudi riyals and increase to SAR300 in 2019 and SAR400 in 2020.

According to a briefing paper prepared earlier by PWC, reforms such as the levy on foreign workers may help augment government revenues, but they can increase the cost of doing business in the kingdom.

Companies in Saudi Arabia currently spend 200 Saudi riyals per month to cover the levy for every non-Saudi employee. This applies to organisations where foreigners exceed the number of local workers.

Starting next year, the fee will be increased gradually until 2020. And for foreign workers not exceeding the number of Saudi staff, the fee will no longer be waived, but will be imposed at a discounted rate.

However, proposals to collect income and remittance taxes have yet to be decided on.

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