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28-Mar-2024
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SAUDI : TAX FOR FOREIGN WORKERS

        

Saudia Arabia will discuss a plan to impose Income Tax on millions of foreign  workers living in the Kingdom.  Soudi citizens will not be taxed .   The measure would  help the country diversify its sources of income after the drop in crude prices.

 

       The proposal which has not been approved, is one of the  measures included in the national transformation plan.  But it is unlikely to be implemented  any time. 

 

     An Economist said that the introduction of tax will not be in the near term.  “If income taxes are introduced in the kingdom and not in other Gulf countries, it will reduce the competitiveness of Soudi Arabia to attract labor. On the other hand, the proposed tax may also support Soudi-ization plans and increasing  job opportunities for nationals.

 

     The success of any such tax would depend on the rate imposed and the segments of  foreign workers that it would be levied on.  A tax on foreigners may end up being borne by their employers who will find it more difficult to attract staff and fill posts whether it is for low or high wage jobs.

 

   The tax could also result in higher posts for services on citizens  as employers pass the cost of the tax on  to the consumers, there should be an indepth study to determine the financial impact it could have on Soudi  house holds.

 

   Cairo based economist at regional investment bank  Efghermes Mohammed Abu said, implementing taxes is in necessarily urgent when  taking into consideration other planned measures to raise non-oil revenues.  The other measures they plan to take including the subsidy and wage cuts are enough to have a significant impact on the budget already.

 

     I don’t believe it is wise to introduce  such a thing at a time when the kingdom is  trying hard to attract direct foreign investments and not having income taxes was one of the  most attractive  prospects hers.  Said Riyad based head of Capital and money markets at  Adeem capital Mohammed Alsuwayed.