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HomeMiddle EastSaudi Arabia to hold off on plans to tax expat remittances for now – report

Saudi Arabia to hold off on plans to tax expat remittances for now – report

Saudi Arabia will resist plans to introduce a tax on expat remittances
for now, according to Mohammed Al-Tuwaijri, secretary general of the Financial
Committee at the Royal Court.

Saudi Arabia’s Shura council has discussed plans to impose a 2
to 6 percent tax on expat workers’ remittances, following a proposal submitted
by former Shura council member Husam Al Angari.

He proposed an initial tax of 6 percent for the first five years
of the expat’s residency, which would then drop to 2 percent.

Al Angari said expats’ remittances had almost tripled since
2004, having increased from $15.1 billion (SR57 billion) to over $36 billion
(SR135 billion) in 2013.

The latest statistics from the World Bank show Saudi Arabia accounts for the
second highest volume of remittances after the US, with $37 billion in 2015.

However, Al-Tuwaijri told Al-Madina Arabic daily that there
are no plans at present to impose any taxes on remittances by expat workers.

Saudi Arabia will impose a $27 (SR100) monthly fee for each
dependent of an expat worker from 2017 onwards, with details of those
nationalities exempted from the fee due to be announced by Minister of Finance Mohammed
Al-Jadaan.

The new levy is expected to bring in an extra $712 million (SR2.67bn)
to state coffers annually from the first year of its implementation, based on
the 11,660,998 expats and dependents in the kingdom.

The fee is expected to rise to $80 (SR300) to $107 (SR400)
per month in 2018, and will increase each year to reach $210 (SR800) per month by
2020.

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