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Saudi Arabia reportedly reviewing fees on expat workers

The expat worker charges may be modified or restructured, but are unlikely to be cancelled entirely

Saudi Arabia is reportedly reviewing the fees it imposes on expat workers [representational image].
Saudi Arabia is reportedly reviewing the fees it imposes on expat workers [representational image].

Saudi Arabia is reportedly reviewing the fees it imposes on expat workers after rising costs contributed to more foreign residents leaving the kingdom, in turn impacting the country's economy.

According to source reporting by Bloomberg, it is unlikely that the fees will be cancelled entirely, but a ministerial committee is said to be looking at “modifying or restructuring” the fee structure. Two sources said a decision is expected within weeks.

However, the report added that Dr Awwad bin Saleh Al-Awwad, Saudi Arabia's Minister of Media, denied in an email through the government’s Center for International Communication that the fee is being reviewed.

READ: Saudi King, PIF unveil multibillion-dollar schemes in Vision 2030 push

The fees were announced in 2016 as part of a drive to increase non-government revenue, a key goal of HH Crown Prince Mohammed Bin Salman’s economic transformation plan, Saudi Vision 2030.

However, Bloomberg noted, the fees have led to thousands of foreign workers leaving the kingdom, which has impacted industries that have traditionally relied on expat-heavy workforce teams.

Two types of expat fees are currently in force. The first is charged for each familial dependent of a foreign worker and was implemented in July 2017. Starting at $27 (SAR100) a month per dependent, it is slated to increase by $27 (SAR100) each year.

READ: Vision 2030 and privatisation to boost Saudi office property sector

The second charge was introduced in January 2018 and is borne by businesses that employ foreigners. It was partly introduced to incentivise businesses to hire Saudis.

Bloomberg said that “as the charges came into effect, many foreigners decided to send their families home, or left [the country] altogether”.

Its report added: “That has affected a wide range of the businesses that served them, from restaurants to telecommunication companies.”

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Construction Week - Issue 747
Aug 03, 2019