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Cheer up, Saudi Arabia says no to tax on expat remittances

  • Majority of the council members wanted a comprehensive study before imposing the new tax.  
  • The international agency had warned the Gulf countries that tax on remittances would negatively impact the economy  
Cheer up Saudi Arabia says no to tax on expat remittances

 

Expat Indians in Saudi Arabia can now heave a sigh of relief. The Shura Council of the Kingdom has rejected the proposal to impose a tax on expat remittances with a huge majority. The proposal to bring tax up to six per cent on the money foreign workers sent back home received only 32 votes in the council while 86 voted against. 

 

Majority of the council members wanted a comprehensive study before imposing the new tax, which was first mooted by former Shura Council member Husam Al Angari. 

 

Ministry of Finance of the Kingdom had earlier clarified that there was no plan to impose fees on government fees on financial transfers to abroad.  The official spokesperson explained that the Kingdom was committed to the principle of freedom of financial capitals flow, including transfers to and from the Kingdom as per the international trends in this regard. 

 

The reports that the Kingdom, with a sizeable Indian labour force, was considering a tax on remittances, had come as a cause of big worry for the expat workers. Reports also said that other Gulf countries were also considering a fee on expat remittances, despite the International Monetary Fund (IMF) warning against such a move. The international agency had warned the Gulf countries that tax on remittances would negatively impact the economy as foreigners make up 80 to 90 percent of the workforce there.  

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