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Foreign-imposed levy in Saudi will continue

DATE: 05-Nov-2019 Reported By: Desabhimani Pravasi

Saudi foreigners' levy likely to continue next year The finance ministry said it would continue all economic reform projects, including LEI. Since July 1, 2017, the government has imposed a levy on foreign workers to encourage more Saudi jobs. In the first year, the 100-year-old Levy was later promoted to a lesser number of Saudi employees. Soon the dependent levy was introduced. The increase in the levy has put companies in a difficult position. Subsequently, the cabinet meeting held on September 24 th exempted levy on foreign workers in industrial establishments. Foreign workers in industrial establishments were exempted from the levy for a period of five to one years.

An estimated 19 million expatriate workers have left Saudi Arabia since 2017 due to levies and nationalization. 1,32,000 people left the job market in the second quarter of this year. According to Jadwa Investments in Riyadh, the number of foreign workers has fallen by 22 percent in the last two years.
At the same time, the Ministry of Labor has repeatedly stated that the work permit for workers in the yellow sector cannot be renewed without complying with a certain percentage of indigenization. Iqama cannot be renewed without renewing the work permit. They cannot change workers' sponsorships and recruit new visas.

According to the Nitaqat project, private firms are categorized into red, yellow, green and platinum based on the rate of indigenization. Services from the Ministry are being banned for institutions that do not meet the rate of Indigenization. Incentives and incentives for green and platinum firms to maintain high levels of indigenization. Green firms are further classified into light green, medium green and dark green. At the same time, the ministry said that when applying for visas for recruitment and recruitment of workers from abroad, firms should take care not to go green.