Saudi Arabia’s Shura Council – the king’s consultative assembly – has proposed taxing the remittances being sent home by millions of expatriates working in the country.
According to a report in the Arab News, the council’s 150 members, all of whom are appointed by the king, have also recommended the cabinet limits the amount expats can send home in a single transaction and proposed a limit on the total they can transfer abroad when they leave the country.
The World Bank estimates that the kingdom’s approximately 10 million expats will send home $36.9 billion this year.
Under the council’s proposals, a six per cent tax would be levied on remittances in the first year an expat was in the country. The rate would gradually reduce to two per cent after five years and remain at that level thereafter.
It would be up to financial institutions in the country to collect the tax with the money being deposited in a special government account.
Anyone caught avoiding the tax would be fined an amount equal to the applicable tax for the first offence, which would then be doubled for every subsequent violation. Saudis found submitting fake statements of salaries or transferring money on behalf of workers, would also be fined.
