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Saudi SMEs going under due to foreign worker levy
| Published: | 22 Feb at 6 PM |
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Tagged: Australia
The Saudi private sector is struggling with the recently-introduced foreign worker levy and is calling for changes.
Unpopular even before its introduction, the controversial Saudi foreign worker levy is now causing difficulties in the SME private sector. According to local media, private firms are struggling to pay the levy and are demanding it be reduced or, better yet, cancelled. The monthly levy for companies who employ more foreign workers than Saudi nationals is SAR400 ($107) per foreign worker, with those who employ equal number or more Saudis than expats paying SAR300 ($80) per foreign worker. During the past week, numerous calls to scrap the levy or exempt certain business categories being made, citing the fact that some 40 per cent of SMEs are about to go under.
Earlier this week, officials from the Council of Saudi Chambers met up with Labour Minister Ali al Ghafis in order to submit proposals for change. In 2019, the levies are due to increase by SAR100 across the board, and again in 2020, by which time most of Saudi’s smaller businesses may no longer exist. Council members are also urging that medium, small and micro-sized businesses be totally exempt from the levy. At present, exemptions only apply to firms with less than five employees.
Meanwhile in Kuwait, there’s potentially more bad news for expat drivers as a decision to forbid expatriates from owning more than a single car is about to be made. According to a ministry spokesperson, some expats have been found to have between 60 and 70 cars, and one with five cars had registered them in the name of a domestic employee. Others were registered to expats without driving licences. No comments were made about expat families where the father needs a car to get to work and his wife needs one to take the children to school.
Unpopular even before its introduction, the controversial Saudi foreign worker levy is now causing difficulties in the SME private sector. According to local media, private firms are struggling to pay the levy and are demanding it be reduced or, better yet, cancelled. The monthly levy for companies who employ more foreign workers than Saudi nationals is SAR400 ($107) per foreign worker, with those who employ equal number or more Saudis than expats paying SAR300 ($80) per foreign worker. During the past week, numerous calls to scrap the levy or exempt certain business categories being made, citing the fact that some 40 per cent of SMEs are about to go under.
Earlier this week, officials from the Council of Saudi Chambers met up with Labour Minister Ali al Ghafis in order to submit proposals for change. In 2019, the levies are due to increase by SAR100 across the board, and again in 2020, by which time most of Saudi’s smaller businesses may no longer exist. Council members are also urging that medium, small and micro-sized businesses be totally exempt from the levy. At present, exemptions only apply to firms with less than five employees.
Meanwhile in Kuwait, there’s potentially more bad news for expat drivers as a decision to forbid expatriates from owning more than a single car is about to be made. According to a ministry spokesperson, some expats have been found to have between 60 and 70 cars, and one with five cars had registered them in the name of a domestic employee. Others were registered to expats without driving licences. No comments were made about expat families where the father needs a car to get to work and his wife needs one to take the children to school.
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