The Saudi national consultative council (Majlis Al-Shura) is reviewing the possibility of imposing taxes on foreign workers. Some 95 percent of Saudi Arabia’s foreign workers are employed in the private sector, remitting around $16 billion annually to their countries of origin.
The tax reform calls for the collection of income tax from all foreigners and a reduction of the tax imposed on foreign companies from 45 percent to 30 percent, reported the KUNA news agency.
The proposed tax break on foreign businesses is considered part of the Saudi government’s efforts to stimulate the country’s economy by encouraging direct foreign investments. It is hoped that such steps would diversify the Saudi sources of income and reduce dependence on oil.
According to Saudi Minister of Finance Ibrahim Al-Assaf the individual income tax, which will affect six million expatriate workers, will be lower than the proposed 30 percent bracket for businesses. The minister added that while the tax law will not be extended to Saudi nationals, it will affect joint ventures. — (menareport.com)
© 2002 Mena Report (www.menareport.com )