A Saudi daily newspaper published the report that the government of Saudi Arabia is currently considering to take effective steps to provide expatriates with an opportunity to practice free trade investment, basically against 20% annual income tax.
The purpose of taking this action is to provide expatriates with a platform where they can invest openly. The Saudi concerned authorities are effectively studying and conducting reports to consider procedures for imposing a tax.
Two options are going to be available for tax. One would be on the profit reported in the financial statements which need to be provided by an expat in terms of revenue, whereas, the second type of tax will work on approximated profits for limited professions.
This second system is hard as verification of such estimated profits is difficult. The reason as for why this free trade investment option is being considered is that the transaction ratios were much limited to Saudis previously which gave rise to the trend of tasattur.
Tasattur is the illegal method by which expats monitor their businesses in the name of Saudis against a certain fee and because of this, the economy of Saudi Arabia is suffering a great loss which accounts for around billions of riyals.
According to the concerned sources, the new tax procedure will authorize the expatriates as investors in their self-employed professions, where there is no need of any Kafeel (sponsor).
This would be done by obtaining the required license which enables expatriates to invest in any free trade zone such as workshops, groceries, catering, contracting and many others.
The news is confirmed by the statement delivered by Minister of Commerce and Investment, Majed Al-Qasabi.
Majed Al-Qasabi stated that the concerned ministry is taking all possible steps to put an end to the Tasattur practice in Saudi Arabia which will also provide a road to the expatriates through which they can practice trade openly.
The expats do not need to hide anymore behind Saudis to practice the trade. He further added that the expatriates would be fully permitted to do their own commercial business.
The Minister of Commerce, Majed Al-Qasabi also stated that Minister of Commerce and Investment has developed a study in which the focus is to sort out the causes and solutions for the commercial cover-up.
Besides this, the Minister called for the clearance of commercial cover-up which is definitely to improve the economy of Saudi Arabia and also provide new jobs for Saudis. An official informed source at the General Authority for medium and small Enterprises quoted that the preparation to combat tasattur is almost complete.
There is complete cooperation with the concerned authorities to mention the rules and regulations which would give a guarantee about the rights of the investor for both Saudis and non-Saudis.
Around 200,000 cases of tasattur are highlighted in Saudi Arabia over the past few years which include 86,000 in the contract and 84 in retail sectors.
However last year, the ministry considered and forwarded about 450 tasattur cases to the Bureau of Investigation and Public Prosecution.
Source: Saudi Gazette