Saudi expats fear liability for controversial foreign labour tax

Published:  20 Dec at 6 PM
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Expatriates in Saudi Arabia are demanding new contracts in an attempt to avoid being held liable for the newly-introduced tax on foreign worker numbers.

The Saudization foreign worker tax introduced by the Ministry of Labour last month has prompted expats to demand fair contracts which include their company’s liability for the tax as well as iqama renewal costs, insurance fees and a minimum wage. Tax levels in the kingdom are some of the most favourable in the world, with company tax paid at an average of 23.6 per cent, giving foreign workers leverage on their demands.

Foreign workers feel they are under threat from the Saudization scheme, with inflation soaring in the country, salaries remaining static for expat positions and fewer benefits included in relocation packages. Contracts issued before the foreign labour tax was introduced do not stipulate responsibility for its payment, leaving foreign workers worried they may be forced to make payment themselves.

Jordanian employee Emad Swalmeh, employed at a Saudi pharmaceutical company, told the Arab News that the country needs to introduce labour relations laws similar to those accepted worldwide. He pointed out that Saudi is part of the International Labour Organisation, but has no pay or working hours regulations, thus exploiting expatriate workers in terms of pay and responsibility for high fees.

Swalmeh feels strongly that the wage gap between expatriates and Saudis should be bridged in the name of fairness and that an authority should be set up to oversee expatriate contracts. The expat-aimed Saudization fees, he adds, should be based solely on labour market forces, not on the scheme itself.
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