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Saudi Arabia to reimburse contractors for increased expat fees

Saudi Arabia's finance ministry has been ordered to repay contractors for increased expatriate worker fees in government projects approved before December 2016

Saudi Arabia plans to repay contractors for increased expat worker fees in government projects approved before December 2016 [representational image].
Saudi Arabia plans to repay contractors for increased expat worker fees in government projects approved before December 2016 [representational image].

Saudi Arabia's finance ministry has been ordered to repay contractors for increased expatriate worker fees in government projects approved before December 2016.

“After reviewing the imposition of monthly fees on expatriate labour… the cabinet orders the finance ministry… to compensate enterprises [that] entered into government contracts before December 2016,” Saudi Press Agency reported.

The kingdom has long relied on foreign labour for jobs like construction, but a recent hike in expat levies and fees for dependents has triggered an exodus of foreign workers from the once tax-free haven, according to Arabian Business, citing AFP.

READ: Can contractors survive Saudi's expat worker levy?

The hike in fees paid by companies for employing foreign workers was implemented in December 2016, while the annual fee for dependents of expat employees went into effect in July 2017.

Research by Jadwa Investment, released in November 2017, revealed that the country’s Saudisation ratio climbed from 42.5% to 43.1% between Q1 and Q2 2017.

The report noted that the increase was primarily due to more non-Saudis leaving the local labour market rather than higher employment of locals.

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