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29 March 2024

Saudi parliament rejects proposal to tax expats

Published
By Staff

Saudi Arabia’s appointed parliament ended a month-long controversy and rejected proposals by some members to impose income taxes on its expatriate workers, newspapers in the world’s dominant oil power said on Monday.

After a heated debate on Sunday, Shura council voted against the proposal which would also have required endorsement by the cabinet and the King.

Newspapers said 70 members voted against the idea while 45 supported the proposal by a few members lobbying for introducing income taxes on the Gulf Kingdom’s foreign community to increase revenue and ease reliance on oil exports that fetch it more than two thirds of its total income.

Shura members who had proposed the tax argued that foreigners in Saudi Arabia are draining the country’s financial resources by siphoning out at least SR100 billion (Dh99 billion) every year in remittance for their home countries.

“After it was opposed by 70 members, the proposed income tax on expatriate workers in the public and private sector was shelved,” Alriyadh daily said.

Saudi Arabia and other Gulf oil producers do not impose direct income taxes but there are plans to introduce VAT and other indirect taxes to boost revenue. Most of them also levy fees on government services.

Sitting atop over a fifth of the world’s extractable crude deposits, Saudi Arabia enforced income taxes in late 1980s but it quickly cancelled the tax after it triggered mass resignations, mainly by qualified Western executives.

Nearly eight million foreigners live in Saudi Arabia, with a total population of around 27.1 million people at the start of 211.