Second Phase of Dependent Levy Fee Begins

In 2017, the Saudi Arabian government announced the introduction of an expat levy. The levy applies to all foreign nationals who are sponsoring dependents. The first phase of the fee began in July 2017 and in accordance with Saudi Arabian local regulation is expected to be paid by the employee themselves.

The second phase of the fees are now due, increasing from SAR100 per month to SAR 200 per month with the fees expected to increase every year up to 2020. In July 2019 the fee will rise to SAR300 and is expected to peak at SAR400 in July of 2020.

The fees are due on a yearly basis at the time of the renewal of the Iqama and are paid to the Jawazat (the issuing office of new and renewal Iqama visas) along with the application.

Whilst the local regulations state that the fee is to be paid by the employee, individual companies can choose to cover the cost for their employees if they deem it necessary or beneficial.

Dependents are classified as spouses (when one is working and sponsoring the other), children, parents, in-laws, employees such as maids or drivers or anyone else who is registered as a dependent under the expats name.

This new dependent levy fee has resulted in many foreign nationals searching for work elsewhere or moving their dependents back to their home country. Before the fee was implemented it was estimated that the government would collect revenue of SAR133 billion by 2020, however as many foreign nationals have avoided the fees by leaving or moving their dependents it is unlikely that these figures will be met.

In July to September of 2017, over 94,000 foreign nationals left Saudi Arabia because of the new fees imposed. This fee will radically change the workforce population in Saudi Arabia and result in more companies employing Saudi nationals as expats leave the country boosting the governments Saudization efforts.

For any questions on the expat levy or Saudization, please contact us at info@proven-sa.com

 

Optimization WordPress Plugins & Solutions by W3 EDGE