What are the chances to postpone further increase in Dependent Fee?

Saudi Arabia has planned on taking some serious steps in order to keep their economy alive. The vision that the country has set its eyes upon has some important reforms that need to be completed in a certain period of time. The country is more than ever determined to achieve the vision than it had ever been before.

In the light of these events, the Finance Minister Muhammad Al-Jadaan along with senior specialists and economic experts came to a decision that some reforms can be extendable up to 3 to 5 years if needed. He further said that the types of reforms whose time period is extended will be officially announced by the government.[irp]

The Finance Minister also pointed out the fact that if some reforms were extended then it would not affect the country’s economy and progress because the country has a strong enough credit capacity along with adequate reserves to support the economy and not let the riyal devalue.

He said that if an issue arises with a particular reform then the Ministry of Finance can handle this case.  One of the reforms is that a dependent fee is imposed upon the expatriates. This became an issue for the majority as many expatriates have settled in Saudi Arabia along with their families and not all of them can pay the imposed dependent fee easily.

Legal experts have claimed that the Dependent’s fee is the responsibility of the employers, but not many employers are ready to pay the fee in the current financial crisis.

It is also important to mention here that the dependent fee is not applicable on all the expatriates living in Saudi Arabia. There are a few categories of Expatriates who are exempt from Dependent’s Fee.

The Finance Minister said that if this reform creates an issue then giving it an extension will not be so difficult as the extra expenses would be covered by the money produced from rationalized government spending.

He said that to achieve the medium-term development level by 2019 or 2020 is much more important than reaching an economic balance. The ministry approved a large amount of money to stimulate the private sector up to 2020 (SR 20 billion) along with housing (SR 15 billion) and Industrial development fund (SR 25 billion).

This shows that the country indeed has adequate reserves and credential capacity and has the strength to postpone reforms like the expat dependents fee. It was a good step to mention postponing such a reform which was in the interest of the public but it did not turn out well for the expats.

The news had spread out that the dependent fee had been suspended but it was not to be, the minister denied such claims and the problem was not talked about again. Many expats could not afford the dependents fees either because their monthly wages were low or they had several dependents.

This had a rather negative impact as the expatriates with less income either moving out of the Kingdom once and for all or they are sending their families back to their own countries and moved to smaller apartments or condos which left many apartments and homes abandoned and empty for rent.

Moreover, the expats along with their families spent 70 to 80 percent of their income inside the country and send some back to their home but now they would be spending very less here and transferring more back to their families at home.

The problem might not stop here because if the dependent fee keeps on increasing then the problem will keep on increasing as well.

Source: Saudi Gazette

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