SR2,400 levy partially lifted for SMEs

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Crown Prince Salman attends the weekly Cabinet meeting in Jeddah on Monday. (SPA)

Crown Prince Salman attends the weekly Cabinet meeting in Jeddah on Monday. (SPA)

The Council of Ministers decided Monday to exclude small and medium-sized enterprises (SMEs) having nine workers or less from paying SR2,400 in annual expat levy for four foreign workers.
Labor Minister Adel Fakeih thanked Custodian of the Two Holy Mosques King Abdullah for the decision, which is aimed at strengthening SMEs in the country.

The Cabinet has set up a ministerial committee to study within three months compensation to be paid to firms that have signed contracts with the government prior to Nov. 15, 2012, when the expat levy was imposed, the minister said.

Fakeih said SMEs were exempted from the levy upon condition that their Saudi owners should work for their firms full time. “The decision offers SMEs a greater opportunity to develop their business activities,” the minister said, adding that it would strengthen the country’s SME sector.

The Cabinet decision has also exempted SMEs from paying expat levy on foreigners married to Saudis and their children, as well as those nationals who could not be deported or enjoy special status, on the basis of Interior Ministry conditions.

The compensation will also be given to contracting companies that presented their offers without taking into consideration the expat levy of SR2,400 to be paid for each foreign worker. The compensation will be equal to the amount paid in expat levy. However, the compensation would be paid after the completion of the contract work, Fakeih said.

Speaking with Arab News, economist Ehsan Buhulaiga welcomed the Cabinet decision to compensate contractors that have signed their deals with government prior to the imposition of SR2,400 levy.

“It gives the message that the government would not take any decision harmful to contractors and businesses,” he said, adding that it would enhance investor confidence in the Kingdom.

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