Saudi finance ministry says no fees on remittances
Shura Council was considering a proposal to impose a 6% levy on expat remittances
Saudi Arabia's King Salman (C) attends a session of Saudi Shura Council in Riyadh, December 23, 2015. PHOTO: REUTERS
RIYADH:
The Saudi finance ministry said on Sunday there would be no fees applied on remittances out of the country, days after the kingdom’s advisory Shura Council said it was considering a proposal to impose a 6 per cent levy on expatriate remittances.
Saudi Arabia is “committed to the principle of free movement of capital in and out of the kingdom, in line with international standards,” the ministry’s official Twitter account said.
Saudi Arabia remains largest source of remittances for Pakistan
Around a third of Saudi Arabia’s 30 million inhabitants are foreigners, many of them attracted by the absence of tax and higher pay than they can get at home.
But the country has been facing a budget squeeze from low oil prices and announced reform plans last year, which included a proposal to impose income tax on foreign workers.
Proposals endorsed by the Shura Council are not always adopted and the kingdom’s central bank governor and finance minister said in the autumn that there were no plans to tax remittances or income.
The country has already introduced a range of new fees to help close a budget gap created by low oil prices.
For example, the government has raised the cost of visas and introduced gradually rising monthly fees on expatriate workers and their dependents.
Pakistan faces over 20% drop in foreign remittances
In its 2017 budget released in the last week of December, the kingdom added a provision to levy fees on each dependent of an expat worker.
It was decided that an expatriate worker will have to pay SAR100 for each of his dependents every month. That amount would increase by SAR100 every year to reach SAR400 per dependent by 2020. For companies employing expats, the monthly fee is expected to stand at SAR300-SAR400 per expat employee by 2018, and increase to SAR700-SAR800 per employee by 2020.
With the kingdom estimated to have over 11.6 million expatriates, the proposed fee is anticipated to add over SAR2.67 billion per year to the government’s revenues from the first year of its implementation.
Published in The Express Tribune, January 23rd, 2017.
The Saudi finance ministry said on Sunday there would be no fees applied on remittances out of the country, days after the kingdom’s advisory Shura Council said it was considering a proposal to impose a 6 per cent levy on expatriate remittances.
Saudi Arabia is “committed to the principle of free movement of capital in and out of the kingdom, in line with international standards,” the ministry’s official Twitter account said.
Saudi Arabia remains largest source of remittances for Pakistan
Around a third of Saudi Arabia’s 30 million inhabitants are foreigners, many of them attracted by the absence of tax and higher pay than they can get at home.
But the country has been facing a budget squeeze from low oil prices and announced reform plans last year, which included a proposal to impose income tax on foreign workers.
Proposals endorsed by the Shura Council are not always adopted and the kingdom’s central bank governor and finance minister said in the autumn that there were no plans to tax remittances or income.
The country has already introduced a range of new fees to help close a budget gap created by low oil prices.
For example, the government has raised the cost of visas and introduced gradually rising monthly fees on expatriate workers and their dependents.
Pakistan faces over 20% drop in foreign remittances
In its 2017 budget released in the last week of December, the kingdom added a provision to levy fees on each dependent of an expat worker.
It was decided that an expatriate worker will have to pay SAR100 for each of his dependents every month. That amount would increase by SAR100 every year to reach SAR400 per dependent by 2020. For companies employing expats, the monthly fee is expected to stand at SAR300-SAR400 per expat employee by 2018, and increase to SAR700-SAR800 per employee by 2020.
With the kingdom estimated to have over 11.6 million expatriates, the proposed fee is anticipated to add over SAR2.67 billion per year to the government’s revenues from the first year of its implementation.
Published in The Express Tribune, January 23rd, 2017.