The Saudi government has decided to waive the expatriate fee that the industrial firms in the country had to pay to the government for each of their foreign employees for five years. The expatriate fee had laid a huge burden on the industrial firms operating privately in the country.
The latest decision taken by the government says that starting from the 1st of October 2019 the Saudi government will pay the mandatory fee for expatriates for five years. Thus the burden laid upon the industrial sector will be reduced to a great extent.
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Expatriate Fee In The Saudi Arabian Industrial Sector
The Saudi Arabian government decided at the beginning of 2018 that businesses operating in the industrial sector had to pay a certain amount as expat fee for each of their migrant employees for five years.
- The decision was imposed in January 2018
- Industrial firms had to pay an expatriate fee for each of their hired immigrant workers for five years
- The amount was 300 Riyals for a single work permit in 2018
- The government had plans to increase it to 600 Riyals in the year of 2019 and 800 Riyals by 2020.
- The strategy of the government was to raise revenue that was not from the oil industry
- The decision was also to encourage the industrial companies in Saudi Arabia to hire workers from within the country
The Major Issues Faced By The Industrial Sector Following The Imposition Of Expat Fee
With the government’s decision to impose expat fees for each of the foreign workers they hired the industrial sector in Saudi Arabia started struggling.
- Many industrial firms ran smoothly because of the cheaper labor they hired from the other nations.
- Most of the private industrial companies in Saudi Arabia especially the ones that operated on a smaller level struggled to pay the expat fee for their hired foreign workers
- Besides the Saudi Arabian government had also cut down subsidies and imposed value-added taxes during the same time which added to the burden of the industrial sector.
- Thus began an exodus of immigrant workers from Saudi Arabia. Many companies were forced to take out foreign workers from their group of employees to cut down their operational costs.
- This decision also started hitting the economy of the country
Decision To Remove Expatriate Fee On The Industrial Sector
The government of Saudi Arabia has decided to waive the expatriate fee that was imposed on the industrial sector of the country where the company had to pay a fee for each of the foreign employees for five years.
- The ruling comes to effect beginning from the 1st of October 2019
- The government of Saudi Arabia will cover the expat fee charges for five years
- The company needs to be licensed to enjoy this benefit.
- In February 2019 the King Salman of Saudi Arabia approved a plan of 3.1 Billion Dollars to ease the burden of taxes and to encourage growth in the economy.
How Will The New Ruling Benefit Immigrant Workers?
The rule of expat fee imposed by this government had caused several foreign workers in Saudi Arabia to lose their jobs. The employers were forced to hire workers from within the country and let go off the immigrants as the operational costs started being unbearable for most of them.
- Now that the government has decided to waive the expat fee the companies can start hiring workers from outside Saudi Arabia
- This means better job opportunities for workers from India and other nations
- The workers also have a better chance to get an increase in their pay scale
However, you need to keep in mind that there are two kinds of fee for expats employed in Saudi Arabia. The new rules apply only to the expat fee paid by industrial business organizations. The international residents are not exempted from paying the fees for their dependents living in the country.