Expat levy to add SR60bn economic burden on Saudis

January 17, 2013

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Jeddah, Jan 17: Calls are mounting for the government to repeal the proposed levy for businesses not meeting Saudization requirements. Analysts have said that implementing the measure will impose an additional economic burden of some SR60 billion annually on Saudi families across the country.

Employers are now forced to pay SR2,400 a year for each foreign worker that pushes the work force at a particular company over the 50 percent target mandated by Saudization laws.

Talal Samarkandi, head of the Engineering Firm Committee at the Jeddah Chamber of Commerce and Industry, said his panel would come out with a detailed study that would convince authorities of the need to abolish the levy.

The move comes after Crown Prince Salman, deputy premier and minister of defense, instructed the Council of Saudi Chambers to submit a report on the levy’s impact on both individuals and the national economy.

Many companies have delayed renewing their foreign employees’ iqamas because of the newly imposed fees. Employers now must pay annually SR 2,600 in labor fees for each foreigner over the 50 percent mandate instead of SR100 for all workers’ renewed iqamas, which was the case previously.

Samarkandi said the government would be able to mobilize SR19 billion annually from the new fees. “As a result of the additional expenditures, traders and businesses will increase the prices of their goods and services by three to five times and consumers will be the main victims.”

Many companies, especially contractors and labor suppliers have already increased their charges. Samarkandi estimated the increase in prices of goods after the imposition of the levy at 10 to 20 percent.

There are about 10 million expatriate workers in the Kingdom including those who have overstayed their visas and other undocumented workers. About 3 million expatriates work as house servants while 7 million work in the service and industrial sector.

The new levy would increase the expenditure of businesses by SR20 billion annually. “To meet this expenditure, traders will increase prices of goods and services by three times and the cost will reach SR60 billion,” Samarkandi explained.

“If we distribute this amount among 2.4 Saudi families with seven members in each family, the cost per family comes to SR10,000 every year or SR1,800 per month,” he pointed out.

“This has become a new cost of living increase for Saudis, and the Ministry of Labor has not taken this into consideration when imposing the levy on private companies,” he pointed out.

He said the ministry was just thinking of how to manage the fund required for paying unemployment allowance without checking its negative implications.

Muhiyuddin Al-Hekami, assistant secretary-general of JCCI, said the organization would calculate the damage caused by the levy on various sectors. “It is our duty to protect the interests of businesses in the city.”

Al-Hekami said the chamber had received complaints against the levy from traders, businessmen and industrialists. “We’ll present a detailed report to higher authorities to take appropriate action,” he said.

Nasser Al-Zahem, head of the Health Services Committee, said the Labor Ministry has to clarify whether the new fees are an expat tax. The health sector, which does not receive an adequate number of qualified Saudis, has been suffering big losses as a result of the new decisions, he pointed out. The levy, he said, would force many small companies to leave the market. “They should consider that the private sector is part and parcel of the state,” he added.

Crown Prince Salman called for studying the issue following a meeting with a business delegation led by Abdullah Al-Mubti, president of the Council of Saudi Chambers.

During that meeting, the CSC delegation explained the negative aspects of the Labor Ministry's decision. Prince Salman emphasized the need to protect national interests. The delegation vowed to employ more Saudis in private companies.

In a previous statement, Labor Minister Adel Fakeih said there was no plan to cancel the levy, which was imposed to bridge the gap between the cost of employing expatriates and Saudis, raising the cost of foreign labor. “This is not a ministry decision, it’s a Cabinet decision,” the minister said.

Saleh Hefni, CEO of Halwani Bros Company, said the levy would contribute to increasing inflation rather than nationalizing jobs. “This tax proposal, I think, will not stop the private sector’s dependence on expatriate workers, rather they will try to cover the cost of expatriate workers by increasing the prices of the products they produce and sell in the market,” he added.

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Agencies
July 23,2020

Abu Dhabi, Jul 23: Muslims in the United Arab Emirates have been asked to perform Eid Al-Adha prayers at home even as mosques will be allowed to operate at an increased capacity of 50 percent from Aug. 3.

Mosques in the UAE have been operating at 30 percent capacity after they reopened on July 1.

Announcing the move, Dr. Saif Al Dhaheri, the official spokesman for the National Emergency, Crisis and Disasters Management Authority, stated that after assessing the situation and coordinating with the concerned authorities, it was decided that Eid Al-Adha prayers would be conducted in homes and takbeers broadcast through visual and audio means.

He also announced that the Emirates Fatwa Council has recommended that donations and sacrifices should be to official charitable causes in the country only.

Al Dhaheri advised the public to donate during this time to the official charitable bodies in the country with sacrifices and donations, through smart applications concerned with sacrifices or through slaughterhouses outlined by the local authorities that guarantee the application of precautionary and preventive measures and provide remote services without the need to enter livestock markets or slaughterhouses.

Al Dhaheri stressed the need to avoid family visits and gatherings, and replace them using electronic means of communication or phone contact, as well as refraining from distributing Eid gifts and money to children and individuals during this occasion recommending to instead use of electronic alternatives.

Al Dhaheri pointed out that it is necessary to avoid visiting pregnant women, children and those with chronic diseases who are most vulnerable to COVID-19 and not to allow them to leave the home and avoid going out to public places to preserve their health and safety.

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News Network
March 28,2020

Mar 28: Just hours after Prime Minister Narendra Modi spoke to the Abu Dhabi crown prince on the Coronavirus Pandemic, India “thanked the UAE authorities for accommodating the 19 Indian nationals who were stuck at Dubai airport for past several days”.

The Indian mission in Dubai tweeted, “They got stranded due to various restrictions to deal with Covid-19 pandemic. Hotel rooms have been given to them inside the airport. Our Consulate had been in constant touch with the Indian nationals and UAE and Indian authorities. We had also provided some financial help to enable our stranded passengers to buy food. The situation was tough due to the pandemic situation.”

During their conversation last evening, Abu Dhabi crown prince Sheikh Mohammed Bin Zayed Al Nahyan had “assured Prime Minister Narendra Modi about the welfare of the over two million Indians living in UAE and contributing to its economy”. PM Modi “thanked the Crown Prince for his personal attention to the health and safety of Indian expatriates in the present situation”.    

A statement issued late on Thursday night by the MEA said, “The two leaders exchanged information and views on the ongoing COVID-19 pandemic, the situation in their respective countries, as well as the steps being taken by their Governments. They agreed that the next few weeks would be crucial to control the spread of the virus, and required concerted and coordinated efforts by all countries. In this context, they appreciated the organisation of a Virtual Summit among G20 Leaders earlier in the day, to discuss the pandemic.

Both leaders emphasised the importance they attach to the strength and richness of the bilateral relationship. They agreed to maintain regular consultations between their officials in the present situation, particularly to ensure continuity of logistical supply lines.”

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News Network
April 5,2020

Beirut, Apr 5: The novel coronavirus has put global trade on hold, placed half of the world population in confinement and has the potential to topple governments and reshape diplomatic relations.

The United Nations has appealed for ceasefires in all the major conflicts rocking the planet, with its chief Antonio Guterres on Friday warning "the worst is yet to come". But it remains unclear what the pandemic's impact will be on the multiple wars roiling the Middle East.

Here is an overview of the impact so far on the conflicts in Syria, Yemen, Libya and Iraq:

The COVID-19 outbreak turned into a pandemic just as a ceasefire reached by the two main foreign power brokers in Syria's nine-year-old war -- Russia and Turkey -- was taking effect.

The three million people living in the ceasefire zone, in the country's northwestern region of Idlib, had little hope the deal would hold.

Yet fears the coronavirus could spread like wildfire across the devastated country appear to have given the truce an extended lease of life.

According to the Syrian Observatory for Human Rights, the month of March saw the lowest civilian death toll since the conflict started in 2011, with 103 deaths.

The ability of the multiple administrations in Syria -- the Damascus government, the autonomous Kurdish administration in the northeast and the jihadist-led alliance that runs Idlib -- to manage the coronavirus threat is key to their credibility.

"This epidemic is a way for Damascus to show that the Syrian state is efficient and all territories should be returned under its governance," analyst Fabrice Balanche said.

However the pandemic and the global mobilisation it requires could precipitate the departure of US-led troops from Syria and neighbouring Iraq.

This in turn could create a vacuum in which the Islamic State jihadist group, still reeling from the demise of its "caliphate" a year ago, could seek to step up its attacks.

The Yemeni government and the Huthi rebels initially responded positively to the UN appeal for a ceasefire, as did neighbouring Saudi Arabia, which leads a military coalition in support of the government.

That rare glimmer of hope in the five-year-old conflict was short-lived however and last week Saudi air defences intercepted ballistic missiles over Riyadh and a border city fired by the Iran-backed rebels.

The Saudi-led coalition retaliated by striking Huthi targets in the rebel-held capital Sanaa on Monday.

Talks have repeatedly faltered but the UN envoy Martin Griffiths is holding daily consultations in a bid to clinch a nationwide ceasefire.

More flare-ups in Yemen could compound a humanitarian crisis often described as the worst in the world and invite a coronavirus outbreak of catastrophic proportions.

In a country where the health infrastructure has collapsed, where water is a rare commodity and where 24 million people require humanitarian assistance, the population fears being wiped out if a ceasefire doesn't allow for adequate aid.

"People will end up dying on the streets, bodies will be rotting in the open," said Mohammed Omar, a taxi driver in the Red Sea port city of Hodeida.

Much like Yemen, the main protagonists in the Libyan conflict initially welcomed the UN ceasefire call but swiftly resumed hostilities.

Fierce fighting has rocked the south of the capital Tripoli in recent days, suggesting the risk of a major coronavirus outbreak is not enough to make guns fall silent.

Turkey has recently played a key role in the conflict, throwing its weight behind the UN-recognised Government of National Accord.

Fabrice Balanche predicted that accelerated Western disengagement from Middle East conflicts could limit Turkish support to the GNA.

That could eventually favour forces loyal to eastern-based strongman Khalifa Haftar, who launched an assault on Tripoli one year ago and has the backing of Russia, Egypt and the United Arab Emirates.

Western countries have been hit hardest by the pandemic, which could prompt them to divert both military resources and peace-brokering capacity from foreign conflicts.

A report by the International Crisis Group said European officials had reported that efforts to secure a ceasefire in Libya were no longer receiving high-level attention due to the pandemic.

Iraq is no longer gripped by fully-fledged conflict but it remains vulnerable to an IS resurgence in some regions and its two main foreign backers are at each other's throats.

Iran and the United States are two of the countries most affected by the coronavirus but there has been no sign of any let-up in their battle for influence that has largely played out on Iraqi soil.

With most non-US troops in the coalition now gone and some bases evacuated, American personnel are now regrouped in a handful of locations in Iraq.

Washington has deployed Patriot air defence missiles, prompting fears of a fresh escalation with Tehran, whose proxies it blames for a spate of rocket attacks on bases housing US troops.

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