Shoura panel seeks income tax for expats
saudigazette
RIYADH — A Shoura Council committee has proposed that foreigners be taxed on the money they earn in the Kingdom.
Muhammad Al-Qouwhis, a Shoura Council member, said his income tax proposal was adopted by the Council’s finance committee. The committee has proposed a study on the matter.
The value of their remittances has increased in the past five years from an officially recorded SR15.3 billion in late 2006. The true figures for money outflows were probably much higher because they did not include informal transfers.
Most of the money is thought to be remitted by lower-paid workers who frequently carry cash with them on trips home rather than making formal bank transfers. Higher-paid workers tend to spend more of their income inside Saudi Arabia because they are more likely to bring their families with them.
In January 2003, the Shoura rejected plans to impose an income tax on expatriate workers whose salaries exceed SR3,000 per month. The Council decided that it was inappropriate to levy taxes on the salaries of non-Saudis regardless of the amount of their pay. — SG
Taxing expats under spotlight
Published: Mar 30, 2012 23:56 Updated: Mar 30, 2012 23:56
The long pending issue of imposing income tax on foreigners would come up again for discussion at the Shoura Council on Sunday. The finance committee of the Shoura has recommended carrying out fresh studies on imposing tax on all foreigners working in both public and private sectors in the Kingdom, Al-Riyadh newspaper reported yesterday.
The new proposal was made by Muhammad Al-Quwaihes, member of the Shoura, who presented it as an additional recommendation attached to the annual report of the Department of Zakat and Income Tax, which had already been discussed by the Shoura.
According to Al-Quwaihes, levying income tax on foreigners would be helpful in further boosting the ongoing Saudization drive. “Foreigners working in the Kingdom transfer about SR100 billion to their countries of origin annually.
The government is neither levying a single riyal in tax or Zakat on their remittance nor do they need to pay any kind of taxes,” he said.
Al-Quwaihes noted that most of the countries in the world impose income tax on individuals who work and earn money in those countries. “It is high time to impose income tax on foreigners. It is also to be noted that foreign workers are beneficiaries of all government support and subsidies given to utility services and products such as water, electricity, wheat, and petroleum products,” he said.
Nearly a decade ago, the Shoura Council reviewed the possibility of imposing taxes on foreign workers but later the proposal was put on the shelf. There are eight million foreigners in the Kingdom, an overwhelming majority of them working in the private sector.
Both Saudi and expatriate employees working in the Kingdom had to pay income tax until it was abolished in 1975. Later, there were moves to reintroduce income tax on foreigners in late 80s. However, in 1988, King Fahd scrapped the plans.
At present, only Saudi
citizens and Saudi companies need to pay Zakat of 2.5 percent annually on
profits and on the assessable amount for individuals, in addition to a 45
percent tax on foreign investors.
In a bid to attract more foreign investment into the Kingdom, the government slashed, in 2004, the tax rate imposed on foreign investors from 45 to 20 percent.
saudigazette
RIYADH — A Shoura Council committee has proposed that foreigners be taxed on the money they earn in the Kingdom.
Muhammad Al-Qouwhis, a Shoura Council member, said his income tax proposal was adopted by the Council’s finance committee. The committee has proposed a study on the matter.
Al-Qouwhis was quoted
Friday in a section of the Arabic press as saying that his proposal would apply
to foreigners working in both public and private sectors. He said he also
submitted an additional memo on the issue. He said that more jobs will become
available for Saudis if it becomes more costly to recruit foreign workers.
Al-Qouwhis said the remittances of expatriates was over SR100 billion last year. He added that foreign workers in the Kingdom do not pay any Zakat (mandatory individual offering for the needy in Islam).
Al-Qouwhis said the remittances of expatriates was over SR100 billion last year. He added that foreign workers in the Kingdom do not pay any Zakat (mandatory individual offering for the needy in Islam).
He said most
governments impose income tax on persons working in their countries. It was
high time the Saudi government did the same because foreigners are benefiting
from subsidized services and essential consumer products.
Expatriates account
for nine out of 10 private sector jobs in the Kingdom. They fill roles that
range from domestic service and factory work to management positions in large
finance companies.
The value of their remittances has increased in the past five years from an officially recorded SR15.3 billion in late 2006. The true figures for money outflows were probably much higher because they did not include informal transfers.
Most of the money is thought to be remitted by lower-paid workers who frequently carry cash with them on trips home rather than making formal bank transfers. Higher-paid workers tend to spend more of their income inside Saudi Arabia because they are more likely to bring their families with them.
In January 2003, the Shoura rejected plans to impose an income tax on expatriate workers whose salaries exceed SR3,000 per month. The Council decided that it was inappropriate to levy taxes on the salaries of non-Saudis regardless of the amount of their pay. — SG
Taxing expats under spotlight
Published: Mar 30, 2012 23:56 Updated: Mar 30, 2012 23:56
The long pending issue of imposing income tax on foreigners would come up again for discussion at the Shoura Council on Sunday. The finance committee of the Shoura has recommended carrying out fresh studies on imposing tax on all foreigners working in both public and private sectors in the Kingdom, Al-Riyadh newspaper reported yesterday.
The new proposal was made by Muhammad Al-Quwaihes, member of the Shoura, who presented it as an additional recommendation attached to the annual report of the Department of Zakat and Income Tax, which had already been discussed by the Shoura.
According to Al-Quwaihes, levying income tax on foreigners would be helpful in further boosting the ongoing Saudization drive. “Foreigners working in the Kingdom transfer about SR100 billion to their countries of origin annually.
The government is neither levying a single riyal in tax or Zakat on their remittance nor do they need to pay any kind of taxes,” he said.
Al-Quwaihes noted that most of the countries in the world impose income tax on individuals who work and earn money in those countries. “It is high time to impose income tax on foreigners. It is also to be noted that foreign workers are beneficiaries of all government support and subsidies given to utility services and products such as water, electricity, wheat, and petroleum products,” he said.
Nearly a decade ago, the Shoura Council reviewed the possibility of imposing taxes on foreign workers but later the proposal was put on the shelf. There are eight million foreigners in the Kingdom, an overwhelming majority of them working in the private sector.
Both Saudi and expatriate employees working in the Kingdom had to pay income tax until it was abolished in 1975. Later, there were moves to reintroduce income tax on foreigners in late 80s. However, in 1988, King Fahd scrapped the plans.
In a bid to attract more foreign investment into the Kingdom, the government slashed, in 2004, the tax rate imposed on foreign investors from 45 to 20 percent.
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