Businessmen in Saudi Arabia have reportedly called for new fees for expats’ dependents and the employment of foreign workers to be charged monthly rather than annually.
From July 1 this year, expats with dependents residing in the kingdom will have to pay a fee that is calculated monthly but paid upfront.
Private sector firms will also need to pay an upfront fee for each foreign worker from the end of the current year.
Abdullah Al-Barrak, a member of the Saudi Society of Accountants, told the Makkah newspaper a monthly payment system in the form of salary deductions would have less of an impact on workers and would not require the hiring of staff for collection.
He added that annual payments could also violate companies’ rights if workers are laid off shortly after the fees are paid.
“Many small enterprises do not strictly apply the contract system for employees and they operate in a highly competitive environment that will make their position vulnerable if they are asked to pay lump sum amounts or to lay off workers. Some companies will have already been pushed out of the market by the time the fees hit the maximum limit in 2020,” he was quoted as saying.
Bandar Al-Jabri, chairman of the Land Transportation Committee at Sharqiya Chamber, said the new fees would impact the survival of companies and could increase the cost of goods and services if they are added to bids for projects from contractors.
He suggested a system of monthly payments for workers on long-term contracts and annual payments for shorter-term contracts would be beneficial.
Under the new system, the fee for each dependent will start at SAR100 ($26.66) per month and increase each year to reach SAR400 ($106.64) in 2020.
The levy for private sector firms will begin at SAR200 a month for each foreign worker from the end of 2017.
This will increase to SAR800 ($213.29) in 2020.