Saudi Arabia has reportedly been discussing possible plans of imposing a tax of between 2% and 6% on remittances.
Saudi Arabia announced through one of its senior officials that there are not any immediate plans of imposing a tax for remittances by expats.
Earlier there were reports that claimed the Shoura Council in the kingdom was discussing the possibility of a tax.
Former member of the Shoura Council Husam Al-Angari, who was the one who submitted the tax proposal, suggested a tax of 6% on expat residents in the first year of their time in the kingdom.
He added that the tax could then drop to just 2% for the next five years.
Al Angari is said to have been quoted as saying that expat remittances in Saudi had nearly tripled over the past 12 years.
The World Bank says that Saudi Arabia represents the second largest volume of remittances worldwide after the United States, with $37 billion during 2015.
A member of the Financial Committee of the Kingdom said that the tax was put on hold at this time.
Saudi Arabia is attempting to find new ways to increase its revenues not related to oil, as it wants to diversify its overall economy due to oil prices plummeting.
In its budget for 2017 released only a week ago, Saudi Arabia included a new provision that levies fees on each expat worker’s dependents.
An expat worker is now required to pay SAR100 ($26.67) for each of its dependants each month, when the fee is implemented starting in 2017. The amount will then increase each year by SAR100 to reach a ceiling in 2020 of SAR 400 for each dependent.
With Saudi Arabia expected to have more than 11.6 million expats, the proposed fee is expected to add more than SAR2.66 billion annually to the revenues of the government from its first year.
At the same time, Mohammed Al-Jadaan the Minister of Finance in Saudi Arabia said the details of exemptions for certain nationalities from the expat dependant’s fee will be released at a later date.
Social, security and political circumstances are all to be taken into consideration as a way to decide the different nationalities that will not have to pay such fees, said the Finance Minister.