Saudi expat fee here to stay, says chamber boss

  • Share via facebook
  • Tweet this
  • Bookmark and Share

A controversial new policy in Saudi Arabia of levying financial penalties on companies that employ too many expatriate staff will not be reversed, one of the kingdom's most prominent commerce officials warned.

Following the introduction of the tax in November, employers with a higher proportion of foreign staff than Saudis must pay SAR2,400 (US$640) each year per overseas worker. The policy is aimed at encouraging more private companies to hire Saudi nationals, which according to government estimates make up less than one-tenth of all employees in the sector.

The move has drawn a mixed reaction across Saudi's business, government and even religious circles. Prince Alwaleed bin Talal, chairman of Kingdom Holding and the Arab world's wealthiest businessman, praised the decision, while the kingdom's legislative Shoura Council criticised the rule, claiming it had not been consulted and that it would harm the Saudi economy.

Earlier this week, even Saudi Arabia's top religious cleric weighed in on the debate. "The Ministry of Labour has to explain the logic justifying this levy on expats,” Grand Mufti Sheikh Abdulaziz Al-Alsheikh, adding that the decision was “not based on clear judgment”.

Despite the objections, Saleh Kamel, chairman of Jeddah Chamber of Commerce and Industry (JCCI), this week said that reversing the policy was not being considered and that businesses can expect more similarly tough measures to follow. “The expat levy file has been closed forever and businesses have to embrace even tougher decisions in the future,” he was quoted as saying by English language daily Arab News.

The JCCI, which itself opposes the policy, said it had prepared a study outlining potential legal violations in the Ministry of Labour's decision, but had been urged not to present its concerns to Saudi authorities. “This has closed the door of discussions on the issue,” Kamel was quoted as saying.

One estimate has placed the cost of the decision to the Saudi economy at SAR60bn.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

Posted by: Vincent

This decision will not affect the high salary of expats, but will make cost for labor and unskilled labor higher without giving more opportunity to Saudi National as they won't take these jobs. Whose Saudi National will take the job of a nanny, servant or work on construction site ? One more bad signal and useless move from Saudi official.

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Most Discussed
  • 53
    Three UAE women attacked with hammer at London hotel

    I really feel that Arabian Business.Com should now close this comments page. This should be all about sympathy for the families not what it is/has turned... more

    Wednesday, 16 April 2014 1:06 PM - Adrienne
  • 51
    Why Dubai isn't a plastic city

    What is definitely not a plastic city. The Arabs have a culture dating back to several centuries. 50 years back Dubai was just a fishing village. Today... more

    Tuesday, 8 April 2014 3:49 PM - P. MADHUSUDAN
  • 48
    DMCC boss Ahmed Bin Sulayem entertains Robert Mugabe in Dubai

    @fga ''However today, simply because he decided to dispossess a few white farmers of their land and redistribute to the poorer indigenous blacks'' more

    Sunday, 13 April 2014 3:02 PM - Matt Williams