How much will Saudi Government earn by imposing Dependent’s Fee on expatriates?

The dependent’s fee has been implemented on all expatriates (apart from government sector employees). Earlier, people were concerned about rules and regulations relating to the dependent fee, now they are concerned about its benefits. Why has the government imposed a dependent fee? Can it benefit the Saudi economy?  Well, the Directorate of Passports is quite optimistic about it. The number of registered dependents residing in Saudi Arabia till date is 2,221,551. If the authorities can collect a fee of SR 100 from every dependent living in Saudi Arabia than Saudi Arabia’s government can earn about SR 2.6 billion in the first year only. Recommended: Procedure to pay Dependent’s Fee for Iqama Renewal[irp]

The assistant director general of the Directorate of Passports namely, Col. Khalid Al-Saikhan further added that this nominal fee of SR 100 per dependent can help SR 2.665 billion a year. This is a huge amount and our systems need to upgrade themselves to avoid failures and crackdown. However, Al-Saikhan has assured that no problem is expected to arise as four of the commercial banks have updated their systems and are ready to accept the newly imposed fees. He also disclosed that the other banks have been notified and hey will be technically prepared to accept the fees in near future. The Ministry of Finance and the Saudi Arabian Monetary Authority (SAMA) shall help the banks for technical up-gradations. Recommended: 7 Categories of Expatriates who are exempt from Dependent’s Fee

As the expat’s dependent fee will rise every year, the money earned through it shall follow suits. So, the government can earn more and more revenues every year. One of the members of the National Society for Human Rights (NSHR) justified its economic significance: Mr. Ibrahim Al-Qayid briefed that the revenues generated from the fine shall help cope up fiscal deficits and help the economy when oil prices are low. It will help economy be less vulnerable towards oil prices.

Looking at the other side of the picture, the expat fee is a way to open job opportunities towards Saudi nationals. If we carefully examine the expat fee, the fee exempts domestic workers: it is only applicable on people hired in the commercial sector. So, this way Saudis will have more job opportunities in the commercial sector. So, some economists believe that not only the expat fee can generate revenues, help economy remains stable when oil prices are low and promote Saudi citizen employment but also it will help get rid of the surplus expats.

The foreigners will be sending their families back home and the economy will get a relief from the surplus foreigners. Since long, these surplus expats have been an economic burden. Mohammad Al-Qahtani has revealed that each foreigner costs SR 50 every day as they consume water, electricity, and gas. Every day the government has to go through a burden of SR 50 for every foreigner. As surplus foreigners, would leave the country, the burden itself will go down. Recommended: Has King Salman canceled Dependent’s fee with immediate effect?[irp]

But this is only the brighter side of the picture. Economists argue that as the foreigners would stay alone in the kingdom and their families in their home country so thus remittances shall boost and expats spending here shall decline. This is not healthy for an economy. Also, it is expected that the real estate prices shall decline.  There are different views of different economists, yet we can all pray that expat fee turns out a good fortune for our nation!

Source: Saudi Gazette