The shura council in Saudi Arabia has rejected a proposal to impose a tax on expat remittances, claiming it would damage the national economy, local media said on Thursday.
It follows a similar decision by the kingdom’s finance ministry, announced on its Twitter feed on Sunday. The ministry tweeted: “[Saudi Arabia] is committed to the principle of free movement of capital in and out of the kingdom, in line with international standards.”
The kingdom has from time to time in the past few years considered introducing fees on a portion of the income expats sent back to their home countries.
Saudi Arabia sees the second largest volume of remittances each year after the US, according to the World Bank, with outflows estimated at $37 billion in 2014.
The latest proposal called for a 6 percent tax on expats’ annual remittances, but it looks to have been ruled out.
The majority (73 percent) of 86 shura council members this week voted against the plans, Saudi Gazette reported.
One member Abdullah Al Balawi claimed that the tax would encourage tatassur, the practice of illegally sending money abroad, or money laundering.
Another member argued that it would dissuade economic migrants from seeking work in the kingdom.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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