Fatima Muhammad

Saudi Gazette



JEDDAH – The Council of Ministers’ decision to give partial exemption from annual levy of SR2,400 for expatriates working at small establishments with a total staff of nine or less will help boost the Small and Medium Enterprises (SMEs), businessmen have said.



President of the Council of Saudi Chambers of Commerce and Industry Abdul Rahman Al-Zamil said the decision is crucial for small enterprises and will enhance their role in the development of the economy.



Head of the young businessmen at the Jeddah Chamber of Commerce and Industry Muhammad Al-Suwailih also welcomed the decision. He called for putting a ceiling on the levy, which should not exceed SR10,000 for a company.

This is a positive decision, but the exemption from levy should be applied to all employees in an establishment which has nine or less expatriate workers, said Fadil Abu Al-Ainain, an economist.



Mufaraj Al-Hagbani, deputy minister of the Ministry of Labor, earlier announced that the Cabinet’s decision also took into consideration the demands of contractors who sign contracts with the government, exempting them from the expat levy.



Last week, the Cabinet approved to give exemption to four expatriate workers of small firms where the Saudi owners themselves manage the establishment.



The ministry started to impose the levy in accordance with a Cabinet decision, which makes it mandatory for each firm to pay a non-refundable monthly amount of SR200 to the Human Resources Development Fund on each foreign worker employed by it over the number of Saudi nationals. The fee is payable each year when an expatriate’s work permit is renewed.



The Cabinet also gave exemption from levy to non-Saudis married to Saudi men and women as well as to their children.



Exemption has been granted also to expatriates from those nationalities banned from deportation.



The Cabinet directed the Ministry of Labor to send it periodic reports with regard to the outcome of the implementation of the directive and proposals that are useful in this regard. Minister of Labor Adel Fakeih said that the Cabinet’s decision to give partial exemption from annual levy will help boost the performance of small firms.

“The decision will provide impetus to this sector after getting rid of a heavy financial burden. This shows the keenness of the Saudi government to encourage owners of small establishments to work full-time in managing their businesses,” he said.