Friday, February 16, 2018
Council asked to Cancel Expat Levy on Companies
The Council of Chambers of Saudi Arabia is about to meet with senior government officials to discuss the expat levy on companies, which started on January 1st, 2018, and is causing concern that it may lead to the closure of 40% of small and medium enterprises. Related: 6 months time to companies to pay expat levy
Members of the Council of Saudi Chambers have also called the labor minister for a meeting to ask about the expat levy to be revoked, which is 300 to 400 Saudi Riyals monthly on each expat employee of the company. Similar: Staying in Saudi hotels will be expensive after municipal tax
- One of the local news outlets reported that 2000 Small and Medium Companies were also planning to submit a petition and a lawsuit jointly to have this expat levy scrapped.
- As per the estimations of some businessmen, the new expat levy on small and medium companies may result in 30 to 40% of the SMEs leaving the market because of the heavy increase in costs in this challenging period, which is making economic growth slow down. The VAT of 5% already increases the cost of living in the Kingdom. Read: Work visas validity reduced to 1 year in Saudi Arabia
- Many companies are struggling to pay back the loans they had taken out before the new fee was introduced. The employers look worried as they come to know the exemption is only for the companies with five or fewer employees.
- According to the estimations, the Government of Saudi Arabia is expecting 6.3 Billion dollars in fees from this year, 2018; 11.73 Billion dollars in 2019 and 17.33 Billion dollars in 2020. AAs the levy fee increases each year, it will be 300 to 400 Saudi Riyals in 2018, 500 to 600 Saudi Riyals in 2019, and 700 to 800 Saudi Riyals in 2020. See Also: Dependent & companion fees as per Jawazat systems
- Companies with 50% or more than 50% Saudi employees will pay the lesser amount compared to the companies with less than 50% of Saudi employees.
- If the levy payment is not made, the Labor Ministry will block services such as issuing residence visas, permits, and licenses. You May Like: No place for Engineers in Saudi Arabia with less than 5 years of experience
- Small and Medium Companies (SMEs) in the Kingdom are considered companies with 1 to 249 employees and a turnover of 3 Million to 200 Million Saudi Riyals Annually.
- One of the members of the Chamber in Abha said the expat levy fee should not be imposed on skilled expat employees, as there are only sufficient Saudis to replace them. Recommend: No expat levy on government contractors
- It is not easy to Saudize jobs in the industrial sector within a day or two, So the sectors like industrial and others should not be considered while implementing the Saudization program on it.
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| Council asked to Cancel Expat Levy on Companies |
