Shoura takes on SR250bn-a-year shadow economy

the-Shoura-council--holding-a-meeting

The Shoura Council is currently debating a new law to fight tasattur or illegal business activities conducted by expatriates in the name of Saudis. The law is significant as the country’s shadow economy is estimated at nearly SR250 billion annually.

A study conducted by Prince Mishaal bin Majed Chair on Conducting Research on tasattur said the value of shadow economy in the Kingdom rose from SR99.9 billion in 1999 to SR249.99 billion in 2011. “This represent about 30 percent of the country’s gross domestic product,” the study said.

“The law for the creation of a government body and the unification of multiple systems related to combating illegal economic activities,” said Fahad bin Jumaa, a member of the consultative body, adding that it would punish people indulged in illegal commercial and financial activities, and help monitor cash flow.

The new law, on which the Shoura Council will vote tomorrow, includes seven indicators, which Jumaa described as “being implemented in more than one place in the world, and essential to help identify and monitor illegal activities.”

This comes at a time when the Kingdom is introducing a number of other specified systems related to developing the judiciary, improving efficiency of economic controls, and combating terror funding, money laundering and drugs.

According to Jumaa, the Shoura committee was rejecting the proposed law because of the presence of other laws to combat illegal activities, including tasattur, money laundering and drugs, which, they argue, cannot be unified.

In response, he argued that the problems go beyond activities of money laundering, tasattur or drugs as “these represent only a fraction of the shadow economy and are the results, not the causes.”

Lawyer Hammoud Al-Najm, a legal expert, said: “I do not think the draft law will be approved because its contents include the reiteration of penalties and criminal offenses and lead to overlapping in criminal jurisdictions.”

 
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