Fees on expat remittances ‘not a solution’, in KSA

The Saudi government is not expected to impose fees on the remittances of foreign workers despite a related proposal submitted to the Shoura Council to discus the subject.

Dr. Mohammed Al-Abbas, a financial investigator, revealed to Arab News that the proposition was made even before the last drops in oil costs.

"Long back, remote laborers' settlements went as high as almost SR150 billion ($40 billion). From that point forward media has required the forcing of charges on such settlements. Around then there was no inclination to force subordinate expenses on expats," Al-Abbas said. 

He included that the main dialog coursing at that point was whether to force expenses on settlements or not. 

Al-Abbas, who is additionally an individual from the Shoura Council, clarified that the principle point behind that thought was to safeguard the nation's monetary stores. "As you probably are aware, when an expat laborer sends cash to his nation, the procedure ought to experience significant monetary standards, particularly the dollar. That implies banks change riyals with dollars. That way, dollars are sent outside the Kingdom. This, obviously, channels our stores of hard cash," he said.

For that reason, Al-Abbas continued, a proposal was made to curb such remittances for the sake of alleviating pressure on our reserves.

Asked if the move would add to the national economy, he said: “I do not want to anticipate events, but I can say, from my own point of view, and this is just my personal opinion, imposing fees on foreign workers remittances was not feasible in the past, nor will it be a major solution, as such remitting processes can be made through a variety of channels,” he said.

He further explained that when an expat pays all his taxes regularly to the government, you could not then stop him from doing any lawful action. This is one of the rights that the regulations of Kingdom have guaranteed him. He added that it is not acceptable to ask a foreign worker who is committed to paying taxes to pay for his remittances. “The Kingdom’s rules are always based on justice and fairness,” he said.

Al-Abbas believes that the move will not work as a solution to national economic issues, such as unemployment. “I do not think such a project will even have a good impact on the national economy, in that it will not contribute to reducing unemployment rates,” he said.

Al-Abbas added that the project would not help to reduce the shadow economy. The experienced analyst thinks that the move would only cause harm to foreign laborers.

He said that the task, if endorsed, will have negative outcomes on outside interests in Saudi Arabia. He additionally noticed that the nations of these remote laborers would respond. "They will do likewise and force charges on Saudis living or working in their nations. This regularly occurs in worldwide financial arrangements," he said. 

He called attention to that the undertaking is as yet a recommendation that may be talked about at the Shoura Council, and the last may concur on the proposal or not. "So far nothing is authentic about that," 

Besides, Al-Abbas said that commanding such weights would likewise make it difficult to control capital versatility easily and decently, and may be a boundary to capital development. "The most imperative point here is to productively control our managing an account framework on the off chance that we need things to go the manner in which we like. Here is the point we should take a shot at. The Saudi saving money framework is solid enough to identify any tax avoidance endeavors," he said. 

He gave an illustration, saying if a remote specialist attempts to dispatch huge measures of cash, he will be addressed as: "Where did you understand that sum from?" on the off chance that he was discovered not paying assessment, intense legitimate measures will be taken against him. 

"These measures can be as cruel as dispossessing his entire cash on the off chance that he neglects to reveal its source," he said. 

Another vital issue that Al-Abbas featured is to help the Ministry of Trade's awesome endeavors in battling conceal (tasatur). He said that it would be better in the event that we center around these two issues as opposed to forcing more expenses on remote laborers. 

Saudi Arabia's Ministry of Finance has prior denied reports that it was wanting to force expenses on the settlements of outside specialists. 

The ministry said it was focused on supporting the free development of capital through authority directs as per worldwide guidelines and practices. The announcement was issued in light of "unjustifiable and unwarranted reports" by a few media outlets. 

The Kingdom is home to in excess of 10 million outside laborers who in 2017 sent nearly $38 billion to their nations of origin. 

The ministry said keeping the settlements free of charges "will likewise upgrade remote speculators' trust in the Kingdom's economy and monetary frameworks." 

The ministry said it had just prevented bits of gossip from claiming charging expats for their settlements in January 2017.