Tax on Family Members in Saudi Arabia Causing Hardship for Expats

riyadhThe government of Saudi Arabia is introducing new taxes on its citizens and expats who are residing in the country to make up for the government revenue. As the state revenue has reduced in the recent years after decline in global oil prices.

Annual Family Tax:

The new tax which is applicable form 1st July is being called ‘family tax’. Now expats are required to pay a fee of 100 Saudi-Riyals for each family member per month which will increase by 100% each ear.

From July 2018 this tax will be doubled to 200 Saudi Riyals.
July 2019 the family tax will be 300 Saudi Riyals/dependent.
From July 2020 the fee will be 400 Saudi riyals.

Family Tax will be payable at each year during the time of Iqama renewal from Passport department. So an expat living with his wife & 2 children will have to be 3,600 Saudi Riyal Annually, this price will increase by 100% each year.

Who Will Be Affected?

Many foreign labor working in Saudi Arabia are living without families and will not be affected by this fee but millions of Pakistani, Indian & Bangladeshi expats who are living with their families will face severe hardships.

Increase In Cost Of Utility & Commodities:

This tax doesn’t come as an exclusive order rather just recently the Kingdom slashed the subsidies on electricity & water, resulting in an increase of 30%. Prices of commodities will also increase after the introduction of Value Added Tax (VAT) from January 2018.

These all changes are being carried out according to ‘Vision 2030’ which was revealed to diversify the economy of Saudi Arabia and end the dependency on oil production. The kingdom will also sell 5% of its ARAMCO, world’s largest oil company  based in Saudi Arabia.

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