6% Tax on Foreign Remittance (Foreign Money Transfer)

6% tax on Remittance

A proposal was submitted to the Shoura Council to impose 6% tax on all remittance by expatriates from Saudi Arabia. Finance Committee of the Shoura Council recognizes that 6% on remittance is a little high. The proposal has been made to reduce the tax on foreign remittance from 6% to 2% after the first 5 years of its implementation.

According to the submitted proposal, the collection of the tax will be made at the time of transfer of money from Saudi Arabia by banking or remittance companies. In this way, a tax of SR 60 will be imposed on the transfer of every SR 1,000 by an expatriate to his home country. Also Read: Procedure to Transfer Money through Enjaz Remittance

Every country has to make difficult decisions

The world economy is constantly changing and today it is somewhere which would seem impossible by experts only a couple of years ago. Such is the unpredictable nature of world economics.  Due to these changes, all countries have had to make some changes and adjustments in how they operate.

The proposal, which was made by the Finance Committee of the Shoura Council, had been drafted by Hossam Al Anqari. Anqari is a member of the Shoura Council. This proposal comes in the wake of strong discussion upon the issue in the entire GCC region.

GCC is the major source of remittance all around the world

In accordance to a report released by Gulf Research Center, earlier on this year, the GCC region countries are vital sources of remittances which circulate billions of dollars mostly to the third world and second world Asian economies.

It is approximated that around 23 percent of the total $400 billion of the world’s official remittances sent in the year 2018 had been sent from the GCC region. This amounts to around $90 billion which makes the GCC region the leading remitter in the entire world. Also Read: 12 Interesting Facts about Remittance Sent from Saudi Arabia

The decision by the Shoura Council

The topic has been discussed in the Shoura Council several times and every time they have refused to impose 6% tax on the remittance sent by expatriates to their home countries. 

There are no plans at present to impose any taxes on remittances by expat workers, Mohammed Al-Tuwaijri, secretary-general of the Financial Committee at the Royal Court, was quoted as saying by Al-Madina Arabic daily on Saturday.

Economists believe that imposing such kind of tax would generate some income for the country but the negative effects of this reform would be devastating.

Source: Arab News

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