Saudi govt imposes 'expat tax'; 41 lakh Indians and their kin affected

Mumbai: The Saudi government’s plan to implement an ‘expat levy’ harbours bad news for all expatriates residing in the country, including Indians, who have for years flocked to the Middle eastern nation in the hope of lucrative careers.

By 2020, each worker will attract an expat levy of SR 800, which translates to roughly Rs 13,759 in Indian terms. By July, 2017, each dependant of an expat will incur a monthly fee of SR 100, which is about Rs 1700 roughly. This levy will witness an upward revision every year, thus, taxing the lives of the 41 lakh Indians who currently reside there.

Firms in Saudi Arabia currently pay SR 200 per month to cover the levy for every non-Saudi employee. This levy applies to companies where expats exceed the number of local workers.

The levy has been introduced to provide firms with greater impetus to hire more Saudis. It is also seen as an additional source of income in the country which has been facing a crisis ever since the US companies started production of Shale oil, thereby affecting crude oil prices adversely.

In the companies in which the number of expats does not exceed the number of Saudis or GCC employees, the fee will be discounted as against a total waiver that existed earlier.

The no-income tax policy for both Saudi nationals and foreign laborers will remain continue, said the government.

This is what the expat levy will mean:

In 2017

Dependents of expats will each attract a fee of SR100, per month, starting from July.

In 2018

Dependents of expats will each attract a fee of SR200, per month starting from July. Companies where the number of expats is equal to or lower than the number of locals, will attract a fee of SR 300, per month, starting from January. Companies where the number of expats exceeds the number of locals, will attract a fee of SR400, per month, starting from January.

In 2019

Dependents of expats will each attract a fee of SR 300, per month starting from July. Companies where the number of expats is equal to or lower than the number of locals, will attract a fee of SR 500, per month, starting from January. Companies where the number of expats exceeds the number of locals, will attract a fee of SR 600, per month, starting from January.

In 2020

Dependents of expats will each attract a fee of SR 400, per month, starting from July. Companies where the number of expats is equal to or lower than the number of locals, will attract a fee of SR700, per month, starting from January. Companies where the number of expats exceeds the number of locals, will attract a fee of SR800, per month, starting from January.

Saudi Finance Minister Mohammed Al-Jadaan informed the media that this levy does not apply to domestic helpers like drivers and cleaners.