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Saudi Arabia is reviewing Dependent fee of Expats - Finance Minister

Saudi Arabia is reviewing Dependent fee of Expats - Saudi Finance Minister


Mohammed Al-Jadaan, the Minister of Finance in Saudi Arabia, said that the Kingdom government is currently rethinking of the Dependent fee of expatriates living in the country. "This move is part of its plan to bring new talent to the Saudi market," he said in response to questions on a Thamanya talk show. Trending : Check how many sim cards available under your iqama online



It is important to remember that the fee on dependent of an expat worker started in July 2017, with 100 riyals per dependent per month for the first year. After that, it increased by 100 riyals every year until it hits 400 riyals per dependent per month in the year 2020.

- As reported by Al-Jadaan, the Saudi economy is currently in a very good phase. "The choice to charge a dependent fee has lowered down on spending in the economy and caused some expatriates to move their kids out of the Kingdom, taking their salary with them," he said.

- He added that, the Kingdom government has a very different view on why it decided to charge a fee for dependent. "The government has a different view, especially since many services are free or cheap, like gas, electricity, water, some medical care, security, roads, and road damage.

- Since more than two million people use these services for free, it was decided that dependents should pay because they are the ones who benefit from the help, he said. He also pointed out that 90% of the money that should be spent or consumed in Saudi Arabia is imported to other countries, so the majority of the money leaves the Kingdom. Most Viewed : Saudi Arabia discovers 1200 years old Othman bin Affan Mosque structure

- The minister said that the choices to cut back on some supports and focus on those who really need them have had real effects and benefits, and these choices are being looked at again and again.

- The Minister continued and said, "If the benefits from having dependents here are higher, we will look again at our decision to charge the fee. This is especially true since the market is currently trying to attract talent and make sure the stability of expatriates and their families as long as they are working for the economy."

- Value-added tax (VAT) has been criticized because it is not based on salary, so people with less money have to pay more. Al-Jadaan also said in response to questions that this was true. It was said by the minister that the Gulf Cooperation Council (GCC) and the Gulf common market systems expect all member countries to have similar finance policies.

- In this light, he said, putting an income tax on people needs a lot of research into the pros and cons from an economic point of view. "However, it is hard to get along with the Gulf countries when it comes to taxes," he said. Read : Iqama issuance and renewal fee 2024 in Saudi Arabia

- "When the decision to put in place a value-added tax was made, the cost of reform on the lowest-income groups was looked at through the Citizen's Account. The cost of the tax on food, electricity, and water was also looked at." Once everyone paid the same tax through the Citizen's Account, money was given to help those with the lowest incomes instead of those with higher incomes. 

- "When gas prices went up, the Citizen's Account was looked at again," he stated, highlighting that no policy is perfect and that "if the advantages exceed the disadvantages, we try to reduce those defects."

- Al-Jadaan talked about studies that looked at the economic and social effects of income tax and how much it costs to implement. He said, "We talked about its effects and even the loss of funds because some states with higher rents depend on income tax a lot, which was terrible for some Gulf countries." YouTube video : No plans to impose income tax in Saudi Arabia on individuals

- It costs a lot more to collect income tax than to collect value-added tax, both in terms of money and information, especially in areas where people spend a lot and hide their money. "This is in addition to the introduction of the electronic invoice, which helps the tax administration know the size of demand for each good, the number of people who buy it, the type of good and its price, the price difference and what causes it, money laundering, and logistical problems. This helps them manage the tax system and the economy as a whole."


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Saudi Arabia is reviewing Dependent fee of Expats - Finance Minister

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