Saudi Arabia is undergoing a lot of changes, including all the new rules and implementation of new taxes along with the special incentives for its locals. All in all, it is good for Saudis but some of the steps have come as a major blow to the Industrialists and entrepreneurs.
The work permit levy on expats and workers have made them flee from the Kingdom and owners of the Small Industries to feel stranded and depressed as the work permit levy is being imposed on them for keeping and hiring foreign technical staff.
The owners of the SMEs are worried as many of them have taken loans from banks to start their projects and if they don’t have skilled or trained staff, they may not be able to complete their projects resulting in bankruptcy and closure of firm producing more jobless people instead.
This issue seriously needs to be seen as many as 2000 SME owners and advocates are already on it and they have arranged a meeting with Labor and social development minister, Ali AL-Ghafis. They have a valid point here, that a time is required to train the locals before hiring them for the job.
In accordance with the work permit levy imposed, there is an incentive for those who hire an equal number of Saudis.
There is a work permit levy of SR 400 per month per expatriate employee. However, those companies and businesses who are maintaining more than 50% Saudi staff will have to pay SR 300 for every expatriate employee per month.
Small Industries generate a revenue as much as from SR 3 million to SR 40 million and act as a backbone for the Kingdom’s economy along with the circulation of money.
According to the Lawyer, Khalid Al-Khaibry about 2,000 of these owners of SMEs are planning to submit a joint petition for the cancellation of the work permit levy as well as they have also planned to file a Lawsuit against the ministry.
Muwaffuk Jamal, deputy governor of the authority for SMEs said his organizations were discussing the matter with the officials. Abdul Rahman AL-Rashid, chairman of economy and energy committee at Shoura council said officials will discuss this matter in detail.
He further said that before imposing this fee the matter should have discussed with the SMEs representatives by the ministry. Spokesman of Labor ministry, Khaled Abalkhail was contacted to query this issue but he did not respond.
Thamir AL-Farshouti, Chairman of Jeddah Chamber of Industry and Commerce said imposing of these bills have upset all especially to those who have just started their business after taking bank loans.
The Chamber had called for a meeting with the minister Al-Ghafis on Sunday in order to cancel the amount or to change it.
Al-Farshouti further said that SMEs play a significant role to strengthen the national economy, as they represent 99% percent of the business. Its closure will make more Saudi’s jobless. Chairman of Makkah Chamber of Industry, Abdullah Falali said these bills have ruined many SMEs.
Abdul Aziz al-Mughtarif, Abha Chamber Chairman too expressed his anger on the ministry’s decision and said that ministry should not impose any bill on skilled foreign workers and should provide financial support to private firms to train the Saudis.
The collective bills would occur heavy losses to SME’s this was said by Chairman of Asharqia chamber Abdul Rahman Al-Atishan said to Minister of Commerce and Investment Dr. Majed Al-Qassabi in a letter.
Source: Saudi Gazette