New fees for Saudi expats’ dependents payable from July

A new fee for expats’ dependents in Saudi Arabia will be paid in advance at the time of residency visa issuance from July 1 this year, according to reports.

Saudi Gazette cited informed sources as saying the fee would be paid annually when a residence visa is sent for renewal or a new visa is issued.

It will start at SAR100 ($26.66) for each individual per month before increasing to SAR200 ($53.32) for each dependent from July 2018, SAR300 ($79.98) in 2019 and SAR400 ($106.64) in 2020.

The collected fees will go to the state treasury, according to the sources.

Private sector companies will also still need to pay the SAR200 a month levy for each foreign worker at the end of the current year.

This will double to SAR400 a month per expat worker in January 2018 and then increase to SAR600 ($159.97) in 2019 and SAR800 ($213.29) in 2020.

These fees will go to the Human Resources Development Fund this year before being divided equally between the fund and the treasury in January 2018, according to the publication.

The fee increases come as the kingdom seeks to diversify its economy away from oil after being hit hard from prices decreases that began in the summer of 2014.

The country has promised to provide SAR200bn ($53bn) of incentives to the private sector over the next four years to aid in this effort but there are concerns that investment will be impacted by increasing costs for businesses.

Read: Saudi plans to pump $53bn into the private sector to boost diversification

Last week, an official at Riyadh Chamber of Commerce and Industry was quoted as saying the new fees would have an “adverse” impact on the private sector despite earning the state up to SAR65bn by 2020.

Read: New Saudi expat fees to impact private sector – official

In a report at the end of last year, Global Investment House also said the fees and decreases to subsidies on electricity, water and fuel would increase input costs for corporates

Read: Saudi budget likely to raise labour costs for corporates

Some expats are also concerned the government will look to tax remittances next, although a senior official has said these plans have been put on hold for the moment.

Read: Saudi has no immediate plans to tax expat remittances

In its 2017 budget, Saudi forecast a deficit of SAR198bn (7.7 per cent of GDP), with projected revenue of SAR692bn – up 35 per cent compared on 2016

This included a 46 per cent increase in oil revenue to SAR480bn.