From 1 July, expats living and working in the Kingdom will have to pay the Saudi government SAR100 (£21, $27, €24) each month per dependent including children and domestic staff.
The fees were expected to be paid annually when a residence permit is sent for renewal.
However, according to Middle East daily Arab News, Saudi Arabia’s General Directorate of Passports of the Ministry of Interior (MoI) said that expats looking to leave the Gulf state this summer for holidays will have to pay the new levy in advance.
Under Saudi’s visa system, known as iqama, expats leaving the country must pay an exit and re-entry fee for themselves and their family members.
This has now been extended to include the new expat tax which means those leaving the Kingdom must also pay the levy in advance for the months remaining on their residence permits, known as iqamas.
Twitter confirmation
Responding to inquiries received on its Twitter account, the Saudi passports office said that the new fees “should be paid before issuance of exit/re-entry visa or renewal of residence permits.”
Meanwhile, dependents are categorised as wives, sons, daughters, parents, wife’s father or mother, house workers, and drivers who are registered under the name of a sponsor, usually where expats work for commercial companies.
However, the Saudi government confirmed last December that the tax will not apply to foreign domestic workers employed by Saudi citizens.
Shaky start
The online system used to pay the expat tax got off to a shaky start over the weekend, adds Arab News, causing a number of foreign residents flying out of Saudi to miss their flights.
Local media are reporting that glitches in the electronic system used to collect payment of the fees meant that expats were left stranded in the airport last week after being unable to pay their exit visa charges alongside the new tax.
Economic reforms
The new tax was announced by the Saudi government in last year’s Fiscal Balance Programme 2020.
It will increase by SAR100 each July before hitting SAR400 in 2020, in a bid boost the Gulf state’s local employment and revenues following persistently weak oil prices.
The Saudi government hopes the tax will raise SAR1bn towards state coffers by the end of the current year, while fees on dependents and levies on foreign workers at private sector companies is expected to add a further SAR24bn.
The programme has been spearheaded by prince Mohammad bin Salman, an economic reformer who was recently named the new crown prince of the Kingdom.
VAT
Value added tax (VAT) of 5% will be implemented in the first quarter of 2018, in line with other GC countries.
