Saudi Arabia is reviewing its policy of imposing fees on expatriate workers after it has negatively affected numerous corporations and has not achieved its primary objective of reducing the country’s unemployment rate, Bloomberg reported yesterday.
The agency quoted four people familiar with the government current deliberations as saying that the “rising costs on the workers have inflicted an economic pain in the country and contributed to an exodus of foreigners.”
“While it’s unlikely for the fees to be cancelled altogether, a ministerial committee is looking at modifying or restructuring them,” one of the sources said. The sources added that a decision on the matter was expected within weeks.
They all spoke on condition of anonymity because the information has not been publicly announced yet.
The Saudi information minister, Awwad Alawwad, denied the recent reports about the fees being reviewed, as alleged by the government’s Centre for International Communication.
The fees, imposed in 2016 as part of a campaign to boost non-oil government revenues, were one of the main goals of the Saudi Crown Prince Mohammed Bin Salman’s economic transformation programme. The move was criticised by most of the employers, especially who have been accustomed to cheap foreign labour for years.
Partly as a result, hundreds of thousands of foreigners have left the kingdom, hitting the already-struggling economy but failing to make much of a dent in Saudi unemployment.