Saudi Arabia has announced its budget for the fiscal year 2017. The year 2016 was not financially good for the Kingdom and credit goes to the diminishing oil prices. However, the way government machinery has tackled the issue is commendable. Under the guidance of King Salman, they are leading this beautiful country to a place where they don’t have to depend on oil exports heavily. In pursuance of the Vision 2030, Saudi Arabia has announced its budget for the year 2017 and we are bringing to you some important financial highlights of the budget which every Saudi Resident should know.
Dependent’s Fee: The Budget 2017 has introduced a minimum expat fee which will be imposed from the beginning of the year 2017. There are 2 kinds of expat fee which expatriates and their employers must pay. The fee will increase gradually year by year. The information we have obtained from the Arab News about this fee is given below.
1-Expatriates living in Saudi Arabia will have to pay SR 100 per month for every dependent under his Iqama starting from July 2017. For example, if you have a wife and 3 children, you will have to pay SR 400 per month.
2-This amount will increase to SR 200 per month per person July 2018
3-Expatriates will have to pay SR 300 per month per dependent from July 2019 and;
4-SR 400 per person per month from July 2020. It means you must pay SR 1,600 per month for a wife and 3 children in the year 2020.
Labor Card Fee: The second type of fee is already imposed on expatriate employees which employers must pay if they have less than 50% Saudi employees. The current amount which employees must pay per annum on each expatriate employee is SR 2,400 per month. Currently, companies who have more than 50% Saudi employees do not have to pay the fee. However, from the next year, they will have to pay it at a discounted rates.
1-It is expected to increase to SR 4,800 for the year 2018 for those companies who do not employ 50% Saudis. The companies who employ 50% Saudis will have to pay SR 3,600 per employee per annum.
2-For the year 2019, It is expected to increase to SR 7,200 for those companies who do not employ 50% Saudis. The companies who employ 50% Saudis will have to pay SR 6,000 per employee per annum.
3-For the year 2020, It is expected to increase to SR 9,600 for those companies who do not employ 50% Saudis. The companies who employ 50% Saudis will have to pay SR 8,400 per employee per annum.
Budget Deficit: The actual deficit during the year 2015 was SR 366 billion ($98 billion) which has reduced to SR 297 billion ($80 billion) during the current year 2016 and according to the budget 2017, it is expected to further reduce to SR 198 billion ($53 billion). It is a remarkable achievement from the side of the government. According to the government projections, the budget deficit is expected to eliminate by the year 2020.
Foreign Reserves: During the preceding 2 years, the government has financed the budget with its foreign currency reserves in addition to the borrowing of SR 200 billion ($53 billion) from the international market.
Budgeted Revenue: The actual revenue for the year 2016 is expected to reach SR 528 billion ($141 billion). However, it is expected to increase to SR 692 billion ($185 billion) during the year 2017 as per the Saudi Budget 2017. Oil revenues for 2017 are estimated at SR480 billion ($128 billion), 46 percent higher than the 2016 projections, while non-oil revenues are estimated at SR212 billion ($56 billion), a 6.5 percent increase.
Budgeted Expenditures: Actual expenditures for the year 2016 are SR 825 billion ($220 billion) which is expected to increase SR 890 billion ($237 billion) during the year 2017 as per the budget.
The Amount of Debt: The total national debt for 2016 was approximately SR 316.5 billion ($84 billion), which is 12.3 percent of the projected GDP (Gross Domestic Product). However, it is expected that the amount of national debt will not increase above SR 772 billion ($206 billion) during the year 2017.
Gross Domestic Product: Gross Domestic Product of Saudi Arabia is expected to reach SR 2.6 trillion with 1.4% increase during the year 2017.
Income Taxes on Expats and Saudis: The Saudi Budget 2017 has not brought any change in the current tax law. It means that there will be no taxes on either expats or Saudis for the year 2017.