The Collective Invoice will push firms out of business: Jeddah Chamber

The Jeddah Chamber of Commerce & Industry (JCCI) has filed a review of the impact of the levy of new fees on expatriate workers employed by local firms, assessing that the levy may force up to 16 percent of incumbent firms out of business.

The Saudi government started as of January 2018, the application of so-called ‘Collective Invoice,’ which binds companies hiring expatriate workers to pay SAR 400 per month for every expatriate worker.

The Collective Invoice is part of the government’s drive to replace foreigners with nationals, given a double digit unemployment rate and radically lower state revenue from oil.

The JCCI assessed that, in average, 16 percent of incumbent businesses will face closure, 11 percent will suffer financial burdens, 5.6 percent will have difficulty in pursuing expansions, and 2.8 percent may fail to cover rising prices of input material.

The chamber of commerce filed a set of recommendations aimed to soften the impact on businesses and individuals, but the labor ministry issued a statement today reiterating its commitment to announced plans.