Saudi Arabia to Impose 6% Tax on International Remittances Sent Back to Pakistan

[SherDil]

Saudi Arabia is eyeing the huge amount of remittances sent by expats in the kingdom every year.



The Saudi Arabia Shura council sat down on Tuesday to discuss a proposal to impose a tax on the remittance money sent by non-residents out of the country.

According to the proposal, a 6% tax will implemented initially on all remittance sent by the expats for the first year. If the non-resident has been staying for 5 years or more in the country, the tax on remittance will be reduced to 2%.

This applies to Pakistani expats staying in Saudi Arabia as well, and has the potential to cut the amount of remittances sent through official channels by Pakistanis to their family at home significantly.

Pakistanis, on average, send over or around $450 million back to Pakistan from Saudi Arabia. A six percent tax will mean that as much as $26 million or Rs. 2.6 billion of international inflows to Pakistan per month will be hampered due to this new tax.

Second Highest Remittances in The World
Currently Saudi Arabia happens to be the second highest in remittance sending countries in the world. Former Shura council member Husam Al Angari who submitted the proposal was quoted saying that remittances have tripled since 2004. They stood at $15.1 billion in 2004 which increased to over $36 billion by 2013.

The World Bank on the other hand claims that Saudi Arabia sent remittances of around $37 billion in 2015. Both Al Angari and World Bank’s statements are similar about Saudi Arabia being the second highest remitting country in the world though. The first place goes to US.

This move might be to decrease the reliance on revenues earned through oil by Saudi Arabia and shift to other means of finance.

Apart from Saudi Arabia, tt seems UAE has also been considering on imposing a tax on remittances as well.

Read More: UAE To Ask Expats About Tax Submissions in Home Countries

For now no formal decision in this regard has been made yet from UAE government.

Via Arabian Business

 

[salarsikander]

Shameless people. Charging poor people for their hard earned income. If you want the capital to stay in the land then how about giving them some ease in opening up business and buying property

 

[Kompromat]

Squeeze the slaves as much as possible.

 

[Russell]

Hoondi businessmen all over Saudi Arabia and the subcontinent will be partying hard

 

[CriticalThought]

They need an overall socio-economic development policy rather than knee jerk heavy handed reactions that create discontent amongst the expat population. The economics of 'slave driving' will catch up at some point. Had they concentrated on socio-ecenomic development from the start rather than grandioseness, they would be in a very good place. The current attempts may be a case of too little too late.

 

[Verve]

This is a clear indication that Saudi budgets are in trouble ...

 

[Max]

$26 million or Rs. 26 billion

26 billion or 2.6 billion?

 

[SherDil]

26 billion or 2.6 billion?

Corrected. Thanks for reading so keenly

 

[Pakistanisage]

26 billion or 2.6 billion?

Sadly, we Pakistanis have been rendered " Numerically Illiterate " because we inherited the " brain dead Numerical System of India ". We need to get away from this wierd backward stuff like Lakhs, Crores and Arubs and move to millions and Billions that is used by civilized World.

And you are right, 26 million USD is roughly little more than 2.6 Billion Rupees (1 Dollar = 108 Rupees). I deduct 1 point for each time my Undergraduate and Graduate students show numbers as Lakhs or Crores.......

 

[bafxet]

Saudi Arabia wants the mostly poor expatriates, like laborers, masons, carpenters, drivers etc etc to pay for their luxuries. First it was the imposition of huge Umra fee and now this 6% Tax. I don't think that it is something fair and neither do i think that they are going in right direction.

 

[Jinn Baba]

Oil not making enough money to fund the thousands of members of the royal family anymore?

 

[war&peace]

Sadly, we Pakistanis have been rendered " Numerically Illiterate " because we inherited the " brain dead Numerical System of India ". We need to get away from this wierd backward stuff like Lakhs, Crores and Arubs and move to millions and Billions that is used by civilized World.

And you are right, 26 million USD is roughly little more than 2.6 Billion Rupees (1 Dollar = 108 Rupees). I deduct 1 point for each time my Undergraduate and Graduate students show numbers as Lakhs or Crores.......

Exactly ... I learnt about the metric system of thousands, million, billion, trillions, etc one is 1000 times the immediate lower neighbour... While crore and lakhs always confuse me and for this denomination system all I can say lakh di lanat

 

[I S I]

Another KSA tactic to pressurize Pakistan to indulge our soldiers in their illegal wars.

 

[nana41]

Shameless people. Charging poor people for their hard earned income. If you want the capital to stay in the land then how about giving them some ease in opening up business and buying property

...or better still,pick your own shit,clean and keep your homes and country tidy,run your own taxis,and construct your own buildings in burnning heat and ,and,..........

 

[Valar Dohaeris]

Sad news as poor labor workers will suffer the most. More appalling is the fact that Kingdom's is consistently taking desperate measure which most of the time lack long term vision. Hope things end well.