Donald Trump effect in Saudi Arabia? Indian immigrant’s dream can go sour with new levy plan

Firms pay a levy of 200 riyal (Rs 3,439) a month for an expat employee, but only for expat employees that exceed the number of Saudi employees in the firm.

In a step that encourages employers to hire more Saudis than foreign workers, Saudi Arabia plans to slap an expat levy on employers.

This will not only limit opportunities for Indian workers in Saudi but also hit their savings — expat levy will come when the country is also going to impose a 5% value-added tax. The combined impact of these two steps will be highly discouraging for Indian immigrants.

“A back of the envelope estimate is that the savings could decline between 6 per cent and 15 per cent as a consequence,” MR Raghu, executive vice president for Kuwait Financial Centre Markaz’, told Gulf News.

At present, companies pay a levy of 200 riyal (Rs 3,439) a month for an expat employee, but only for expat employees that exceed the number of Saudi employees in the company. From next year, the levy on expat workers will be gradually increased.

The fee is waived for companies in which expats do not exceed the number of Saudi or GCC employees. But with the new measure, the companies will be charged, though at a discounted rate.

Here is what the new expat levy will cost, according to Arab News:

In 2017

• Dependents of expats will each incur a monthly fee of SR100 (Rs 1,719), from July onwards

In 2018

• Dependents of expats will each incur a monthly fee of SR200 (Rs 3439), from July onwards
• In companies where the number of foreign employees is equal to or lower than the number of Saudis, a monthly fee of SR300 (Rs 5,159) will apply from January onwards
• In companies where the number of foreign employees exceeds the number of Saudis, a monthly fee of SR400 (Rs 6,879) will apply from January onwards

In 2019

• Dependents of expats will each incur a monthly fee of SR300, from July onwards
• In companies where the number of foreign employees is equal to or lower than the number of Saudis, a monthly fee of SR500 (Rs 8,599) will apply from January onwards
• In companies where the number of foreign employees exceeds the number of Saudis, a monthly fee of SR600 (Rs 10,319) will apply from January onwards

In 2020

• Dependents of expats will each incur a monthly fee of SR400, from July onwards
• In companies where the number of foreign employees is equal to or lower than the number of Saudis, a monthly fee of SR700 (Rs 12,040) will apply from January onwards
• In companies where the number of foreign employees exceeds the number of Saudis, a monthly fee of SR800 (Rs 13,759) will apply from January onwards.

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