Overseas Health Insurance News: Shoura Council challenges Saudi expat employee tax -
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Overseas Health Insurance News: Shoura Council challenges Saudi expat employee tax

A law which came into place in the middle of November requiring Saudi businesses to pay £400-a-year in tax on behalf of foreign employees is being challenged, it has been revealed.

The legislative assembly, the Shoura Council, which is the equivalent of Parliament in the UK, is unhappy that it was not consulted by the minister of labour before the tax rules were brought in.

Because the kingdom of Saudi Arabia is an absolute monarchy there are no legislative powers given to the Shoura Council, despite its purpose being to draft and advise on laws.

Speaking to the Saudi Gazette recently, Khalifa al-Dowsary, a member of the council, said that the ministry "doesn't always show any tolerance" when it makes its decisions, and therefore there is no room for diplomacy.

It is intended that the tax is to serve as a "Saudisation" policy to reduce the dependency on expatriate workers, while also boosting the unemployment rate in the kingdom, which currently stands at around ten per cent.

Anoush Ehteshami, professor of international relations at Durham University, told the Daily Telegraph that membership of the Shoura Council is "indicative of membership".

"In recent years, the Shoura has increased its numbers, its constitutional influence, and its range of committees, all with the royal encouragement. King Abdullah has appointed these people to advise him, and he is highly unlikely to ignore their opinion.”

Recently, the kingdom's ministry of labour invited users of Twitter to a meeting to discuss the expat employee fee. Businessmen in Saudi Arabia took to the social networking website to announce their displeasure, and minister Adel al-Fakeih hoped to explain the ministry's position and implications of the increase.

"The meeting establishes a culture of dialogue between officials and citizens," Khaled al-Ulqomi, a Saudi businessman and a Twitter user, told Al Arabiya.

"We appreciate the minister's initiative and courageous step."

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