New Saudi expat fees to impact private sector – official

New monthly fees imposed on expats for each of their dependents will have an “adverse” impact on private sector firms, an official at Riyadh Chamber of Commerce and Industry has been quoted as saying.

Local newspaper Al-Watan cited Abdullah Al-Maghlouth, a member of the chamber’s investment and securities committee, as arguing the the fees would have a negative impact on the private sector despite earning the state up to SAR65bn by 2020.

“The fees will have an adverse effect on the private sector including the contractors, the building material, the food and consumer products and will increase prices,” he was quoted as saying. “The citizen will be harmed. This will also harm the attractiveness of the work environment in the kingdom.”

He added that the real estate market, including offices, shops and apartments, could also be affected as expats opt to leave the country with their families.

The official called for measures to alleviate the negative impact of the measures including the nationalisation of jobs.

Al-Maghlouth also called for the ability for expats to invest in special funds to encourage them to spend a percentage of their income inside the kingdom.

In its 2017 budget, the kingdom announced new monthly fees for expatriates with dependents residing in the kingdom.

Read: Saudi has no immediate plans to tax expat remittances

These will begin at SAR100 a month per dependent in 2017 before increasing SAR100 each year to reach up to SAR800 by 2020.

Last week, Global Investment House said the Saudi budget was likely to boost input costs for corporates the kingdom over the coming years.

The monthly fee, as well as increases in utility bills due to reduced electricity and water subsidies are expected to raise expenses for businesses in the kingdom, it said.

Read: Saudi budget likely to raise labour costs for corporates