Opinion: Expatriate fee in Saudi Arabia comes at a cost

According to some Saudi economists, the expat dependents fee is a vital means to solve the issue of unemployment in the country. The fees could be a burden on expatriates, many of whom will send their working family members home and prefer to stay in the kingdom alone.

An estimated 11 million foreigners work in the Saudi private sector, with 2.3 million of their dependents based in the kingdom, according to the Public Authority for Statistics. Spurred by this new tax, about 670,000 foreign workers are expected to leave Saudi Arabia by 2020, a report prepared by Banque Saudi Fransi revealed. According to the report, some 165,000 expats are expected to leave the country every year. In addition, the report said that the new fees imposed on the companions of the workers would add about 75 billion riyal to the exchequer over the next three years.

Now this is brushing the canvas with a broad paintbrush because it is apparent that with a shrinking expat population, one cannot expect an increase in revenue through the levying of a dependent fee. When an expat family leaves Saudi Arabia, many things are bound to happen. The money that was being earned and spent there would then be remitted. The money that had previously been used to vitalise the local economy through a multitude of channels and avenues would suddenly be wire-transferred to a distant land.

Indeed, if we begin to take stock of the numbers of departing expatriate dependents and the loss of revenue resulting from such an exodus, the figures in terms of revenue generation will not be encouraging. Wouldn’t a more profitable option be to allow long-term and law-abiding expats to apply for citizenship or grant them permanent residency? The colourful diversity and economic muscle of the Saudi society would then be greatly enhanced.

Source Credit: Khaleej Times
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