International Computer Magazine
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.
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