No change in expat fee: Finance Ministry

November 03, 2019

Saudi Gazette report

There won’t be any change in the fee of expatriates, according to the Ministry of Finance. The ministry stated that the State would continue implementing initiatives aimed at developing and diversifying sources of non-oil revenues and enhancing their sustainability over the next year in the general budget of 2020.

The ministry said that these measures include the continuation of charging fees on expatriate workers as well as on their dependents, and application of the selective tax on sweetened beverages, which will come into force in December. The government will also continue periodic adjustments to energy prices to reach benchmark levels so as to contribute to prudent use of resources and reorient subsidies to its beneficiaries.

The ministry expects revenues of SR833 billion for 2020, down from SR917 billion projected for 2019, while spending expected to reach SR1.02 trillion for 2020 with a projected deficit amounting to SR187 billion. The total expenditure in 2019 is expected to reach SR1,048 billion, as the government aims to achieve fiscal discipline and stability as key objectives for sustainable economic growth over the medium term.

According to an earlier statement of the ministry, companies, which have more or equal Saudi employees than foreign employees had to pay SR500 per month for each foreign worker effective from Jan. 1, 2019. If the companies have more expatriates than Saudis, then expat levy would be SR600 per month. In 2020, this fee will be hiked to SR700 and SR800 respectively.

The government started charging dependents’ fee effective from July 2017. The monthly fee per dependent was SR100 effective from July 2017 and this increased to SR200 and SR300 from the first day of July 2018 and 2019 respectively and it will be hiked to SR400 from July 1, 2020.

The General Authority of Zakat and Tax (GAZT) had said earlier that it will start implementing a decision of the Gulf Cooperation Council (GCC) to expand the selective tax on beverages harmful to health, and accordingly 50 percent selective tax will be charged for sweetened beverages effective from Dec. 1.

GAZT has recently approved amendments in its selective tax regulations to include sweetened drinks as well as electronic smoking devices and their liquids. According to the amended regulations, a selective tax of 100 percent will be imposed on tobacco and its byproducts, electronic smoking tools and their liquids, as well as energy beverages, while a 50 percent tax will be applied to soft drinks and sweetened drinks.

According to the ministry, more than 300,000 businesses, including companies and establishments, have benefited from the government’s private sector stimulus initiatives and these are equal to 70 percent of the total number of active enterprises in the private sector for the year 2018.

It said that the Office of the Private Sector Stimulation periodically evaluates performance indicators of the existing initiatives, ensuring that targets are met to avoid risks at an early stage and to ensure that the private sector is being benefited from these initiatives.

Minister of Finance Mohammed Al-Jadaan said recently that 2020 budget will continue the implementation of programs and initiatives that aimed at strengthening the private sector’s role in the economy as the main driver of economic growth and job creation.

Currently, there are 22 support initiatives for the private sector, including cash subsidy and financing guarantees, offered by the entities implementing the initiatives such as the Ministry of Finance, the Ministry of Housing and Saudi Arabian General Investment Authority.

In December 2018, Custodian of the Two Holy Mosques King Salman issued a royal decree, allocating SR72 billion to boost the private sector growth through 17 initiatives.

The financial sector development program aims to accomplish a number of initiatives during 2020, including a transition to a cashless community by increasing non-cash transactions by 28 percent.

The ministry also noted that the oil revenues were affected this year by fluctuations in world oil prices, in addition to the OPEC Plus agreement for a production cut.

However, the non-oil revenues have contributed to compensate part of the decline, characterized by stability as a result of economic activity, as the recovery of economic growth during the years of 2018 and 2019 contributed for an improvement in the non-oil revenue performance.

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