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Shoura Council fights for repeal of expat worker levy
| Published: | 18 Dec at 6 PM |
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The Saudi Arabian Shoura Council has come out against the recently-introduced expat worker levy, saying it will result in a disastrous rise in the cost of living.
The expat worker levy, passed into law earlier this month, forced private Saudi companies to pay an annual levy on each foreign worker employed in excess of the number of Saudi workers. The Saudization–aimed move caused consternation amongst foreign firms employing a large number of expat specialists as well amongst companies hiring Southeast Asian cheap labour for low-paid jobs Saudis will not do.
Shoura Council members are convinced the levy is inflationary, imposing financial burdens on Saudi citizens, and believe it has been brought in at a difficult time, especially for struggling small and medium firms. Many companies affected are complaining bitterly that Saudi workers as yet are unable or unwilling to fill most of the expat posts.
According to the Arab News, the council’s Human Resources and Management Committee is searching for ways to convince the Ministry of Labour to reverse its decision and rescind the new law. Council member Ibrahim al-Suleiman said his committee is not happy about the ministry’s motivation or justification in taking the decision without considering its impact on citizens as well as traders.
Council member Abdul Wahhab al-Mujthel says it’s illogical to expect a company employing 5000 expats to suddenly replace them with 2500 competent and experienced Saudi workers. At present, there is an estimated number of around six million expat workers in the kingdom.
Another council member states that the law should have only been applied to companies in sectors suitable for Saudi workers, instead of being brought in across the board. Although he agrees with Saudization given the 10 percent unemployment rate, he believes a selective approach is essential to avoid harming the economy.
The expat worker levy, passed into law earlier this month, forced private Saudi companies to pay an annual levy on each foreign worker employed in excess of the number of Saudi workers. The Saudization–aimed move caused consternation amongst foreign firms employing a large number of expat specialists as well amongst companies hiring Southeast Asian cheap labour for low-paid jobs Saudis will not do.
Shoura Council members are convinced the levy is inflationary, imposing financial burdens on Saudi citizens, and believe it has been brought in at a difficult time, especially for struggling small and medium firms. Many companies affected are complaining bitterly that Saudi workers as yet are unable or unwilling to fill most of the expat posts.
According to the Arab News, the council’s Human Resources and Management Committee is searching for ways to convince the Ministry of Labour to reverse its decision and rescind the new law. Council member Ibrahim al-Suleiman said his committee is not happy about the ministry’s motivation or justification in taking the decision without considering its impact on citizens as well as traders.
Council member Abdul Wahhab al-Mujthel says it’s illogical to expect a company employing 5000 expats to suddenly replace them with 2500 competent and experienced Saudi workers. At present, there is an estimated number of around six million expat workers in the kingdom.
Another council member states that the law should have only been applied to companies in sectors suitable for Saudi workers, instead of being brought in across the board. Although he agrees with Saudization given the 10 percent unemployment rate, he believes a selective approach is essential to avoid harming the economy.
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