Saudi Rejects Expat Tax Proposal

A majority of the Shoura Council members agreed that imposing an income tax on expatriate workers would be “untenable.”

Saudi Arabia’s Shoura Council rejected a move to impose taxes on the incomes of expatriate workers in the Kingdom during its session on Sunday.

Those supporting the proposal did not reach the required majority in the house to pass the move, local media quoted Secretary-General of the Shoura Council Dr Mohammed Al-Ghamdi as saying after the meeting.

The members pushing for the proposal said that imposing a tax on expatriate workers would reduce the differences between their salaries and those of locals. This in turn would increase the opportunities for Saudis to work in the private sector.

However, according to the reports, those opposing the move said that it was “untenable at this stage due to the Kingdom’s development requirements in different sectors and specialisations.”

Currently, expatriates fill up around 90 per cent of private sector jobs in Saudi Arabia.

Last week, the country’s Labour Ministry announced that more than one million Saudi nationals are now receiving unemployment benefit. The “Hafiz” programme, started late last year, pays unemployed Saudis SR2,000 ($533) a month for up to one year.

“The number of beneficiaries this month [March] rose by 40 per cent from last month and by 170 per cent from December when the programme started to pay the monthly subsidy,” the official Saudi Press Agency reported, quoting Khaled al-Ajmi, a Labour Ministry official.