Review of expatriate fees is a 'positive' step, says MUFG

The review of expatriate fees in Saudi Arabia is a "positive" step, as rising costs are taking a toll on economic activities, MUFG Bank said in a recent report.

"We see the review as a positive step to reconcile the government’s fiscal needs while enticing the private sector to continue to grow, though we do not see a high probability of expat fees to be annulled completely," it noted.

According to the report, a ministerial committee is reviewing ways to modify or restructure them.

Saudi Economy and Planning Minister Mohammed Al Tuwaijri told Bloomberg last month that the Kingdom will keep its policy of imposing fees on foreign workers but is open to reconsidering them if there’s an economic need.

“We got mixed feedback so far on the expat fees. The position today is business as usual -- we are sticking to our position," the minister stated.

The expat fees, announced in 2016, were part of a drive to increase non-oil government revenue, a key objective of Vision 2030.

Dependents of expats will each incur a monthly fee of SAR 300 from July 2019 onwards, which is set to rise to SAR 400 from July 2020.

Companies, where the number of foreign employees is equal to or lower than the number of Saudis, a monthly fee of SAR 500 will apply from January 2019 onwards, rising to SAR 700 for 2020.

In the case of companies, where the number of foreign employees exceeds the number of Saudis, the 2019 monthly fee stands at SAR 600 but will increase to SAR 800 next year.