6% Tax on Expat Remittances Under Study
The Shoura Council’s finance committee is backing a proposed tax on the remittances of expats, starting from 6 percent in the first year and gradually reducing to 2 percent permanently from the fifth year onward.
The tax proposal was drafted by Hossam Al-Anqari, head of the General Auditing Bureau and former member of the Shoura, who said this would be a way to force expats to invest or spend their money in the Kingdom.
The tax would be on all money transfers by expats, with the collection being done through financial institutions in the country, and deposited in a special government account, according to a media report on Thursday.
There would also be limits on the amount that an expat can send abroad at any given time. There would also be limit on what expats can transfer abroad if they leave the country. The amounts that would be allowed abroad would be calculated in terms of the income of expats.
There would also be several measures introduced to prevent tax evasion and penalize those who fail to comply, and resolve disputes. The fines would be equal to the tax levied for the first offense and doubled for every repeat violation. Citizens found submitting fake statements of salaries, or transferring money on behalf of workers would also be fined.
The finance committee stated that measures must be taken to tax expats so that the country can gain more income. The committee’s statement comes as annual remittances reportedly rose from SR56 billion in 2005 to over SR135 billion in 2014.
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