Saudi prepares law to end sponsorship (Important for Non-Saudis here)

[Mosamania]

Saudi prepares law to end sponsorship

The sponsorship system of foreign workers in Saudi Arabia could end soon if a draft law prepared by the Ministry of Labour is adopted, a report said.

The draft law will be submitted to the Council of Ministers in the next few months for final approval, a source was quoted as saying by the Saudi Gazette.

An agency affiliated to the ministry will be created to look after foreign workers.

The legislation will prevent employers from holding the passports of their employees. It will also strip the sponsor of the power of issuing an objection letter which currently prevents employees from bringing their families or visiting their relatives in other regions of the kingdom, the report said.

It also proposes the issuing of a mandatory insurance policy to guarantee the financial rights of employers and employees. The policy is also meant to cover the payment of employees’ financial entitlements for at least six months.

The insurance also covers employees’ ticket fares in case of the deportation of the employer. Employers are also covered for risks such as theft, cheating, embezzlement, breach of confidentiality and any other damages incurred by employees, the report said.

Saudi prepares law to end sponsorship
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No more Kafeeeeeeeeeeeeeeeeeeeeeeeeeeeeeel. Yes for Saudi Arabia fixing its own backyard and moving forward.

OMG KSA is moving forward in such a fast rate it is unbelievable.

 

[somebozo]

The fact that Saudi labor market has become destabilized with daily antics of labor ministry and many foreign investors with ambitious projects are now pulling out their investment because they simply cannot find the required man power. This does not end the kafala system but in fact just replaces the usual kafeel with a giant uncontrollable monster. And this is after the labour ministry has introduced soo many grip tightening reforms with Nitaqat...The undertone of the labor minister is always humiliating the foreign works and a trail of his comments declaring foreign workers as "uneducated, illegitimate, untrustworthy, money launderers, crooks and criminals can be found in news papers.

The question lies at the root? Why do you need a kafala system which is reminiscent of slavery??

Instead Kuwait, Bahrain, Oman and UAE are one step ahead which allows foreigners to establish trade in their own name with minimal capital. The future is returning to the same all major corporations with cover the Saudi market from UAE or Kuwait or Bahrain.

If you walk into any big company, they will tell you that they are not accecpting any new project due to Nitaqat and there is atleast 9 I know of who are relocating to UAE or Bahrain.

Labour ministry is headed by a person who wears the crown of screwing Jeddah and people actually prayed in Haram to get rid of him. Very funny!

Sorry to say but if you take away the sanctions, Iran, Turkey, UAE and Bahrain still scores as an ideal country to invest in Middle east. A lot of foreign investors leaving in distaste of unstable laws are never likely to return to KSA after a bitter experience.

it is not fixing its backyard but becoming corporations where small business men are driven out of market by large corporations using ministers as their intermediary.

So you are going to have Wallmark taking over retail sales (panda), BestBuy taking over electronics (Extra), K-Mart taking over garment sales (Al Haram) and so forth.

 

[somebozo]

and here from from yesterdays news paper. This reminds me of what I heard from older age groups about 70 and early 80's. Lot of big talk but eventually when workers begin to exit and factories were forced to close of investors forced to flee to US and Europe - King Fahad reversed all labour caps.

This time it looks like the same story. The consultants of Labour and Economic ministry are actually on someone else payroll.

Taxing expats under spotlight

By RIYADH: ARAB NEWS
Published: Mar 30, 2012 23:56 Updated: Mar 30, 2012 23:56

The long pending issue of imposing income tax on foreigners would come up again for discussion at the Shoura Council on Sunday. The finance committee of the Shoura has recommended carrying out fresh studies on imposing tax on all foreigners working in both public and private sectors in the Kingdom, Al-Riyadh newspaper reported yesterday.

The new proposal was made by Muhammad Al-Quwaihes, member of the Shoura, who presented it as an additional recommendation attached to the annual report of the Department of Zakat and Income Tax, which had already been discussed by the Shoura.

According to Al-Quwaihes, levying income tax on foreigners would be helpful in further boosting the ongoing Saudization drive. “Foreigners working in the Kingdom transfer about SR100 billion to their countries of origin annually.

The government is neither levying a single riyal in tax or Zakat on their remittance nor do they need to pay any kind of taxes,” he said.

Al-Quwaihes noted that most of the countries in the world impose income tax on individuals who work and earn money in those countries. “It is high time to impose income tax on foreigners. It is also to be noted that foreign workers are beneficiaries of all government support and subsidies given to utility services and products such as water, electricity, wheat, and petroleum products,” he said.

Nearly a decade ago, the Shoura Council reviewed the possibility of imposing taxes on foreign workers but later the proposal was put on the shelf. There are eight million foreigners in the Kingdom, an overwhelming majority of them working in the private sector.

Both Saudi and expatriate employees working in the Kingdom had to pay income tax until it was abolished in 1975. Later, there were moves to reintroduce income tax on foreigners in late 80s. However, in 1988, King Fahd scrapped the plans.

At present, only Saudi citizens and Saudi companies need to pay Zakat of 2.5 percent annually on profits and on the assessable amount for individuals, in addition to a 45 percent tax on foreign investors.

In a bid to attract more foreign investment into the Kingdom, the government slashed, in 2004, the tax rate imposed on foreign investors from 45 to 20 percent.

© 2010 Arab News

 

[BATMAN]

Its a good gesture but not sure if people deserve that or not!!

 

[Mosamania]

The fact that Saudi labor market has become destabilized with daily antics of labor ministry and many foreign investors with ambitious projects are not pulling out their investment because they simply cannot find the required man power. This does not end the kafal system but in fact just replaces the usual kafeel with a giant uncontrollable monster. And this is after the labour ministry has introduced soo many grip tightening reforms with Nitaqat...

The question lies at the root? Why do you need a kafala system which is reminiscent of slavery??

Instead Kuwait, Bahrain, Oman and UAE are one step ahead which allows foreigners to establish trade in their own name with minimal capital. The future is returning to the same all major corporations with cover the Saudi market from UAE or Kuwait or Bahrain.

If you walk into any big company, they will tell you that they are not accecpting any new project due to Nitaqat and there is atleast 9 I know of who are relocating to UAE or Bahrain.

Labour ministry is headed by a person who wears the crown of screwing Jeddah and people actually prayed in Haram to get rid of him. Very funny!

Sorry to say but if you take away the sanctions, Iran, Turkey, UAE and Bahrain still scores as an ideal country to invest in Middle east. A lot of foreign investors leaving in distaste of unstable laws are never likely to return to KSA after a bitter experience.

it is not fixing its backyard but becoming corporations where small business men are driven out of market by large corporations using ministers as their intermediary.

So you are going to have Wallmark taking over retail sales (panda), BestBuy taking over electronics (Extra), K-Mart taking over garment sales (Al Haram) and so forth.

Well laws sucked in the past and they must change. Yes unstable laws are now making things a bit hectic true but these laws are now guaranteeing the rights for everybody. The rights for Saudis to work in their countries instead of a foreigner doing the same work for half the pay. And now this which will guarantee the rights of foreign workers.

All times of transition create friction for a while until things setteled down and the Arab spring main igniter was unemployment and Saudis in their own countries graduating by hundreds of thousands to not a find a job anywhere or get hired by a company because there is a foreigner who will do the same job for less and quite frankly it was a ticking time bomb and had to be defused.

 

[Kompromat]

Good move , saudis are not so evil after all - toast it !

 

[hunter_hunted]

Thanks to Human Rights commission for showing the Saudis their real face . This kafala system really is a slave system. Just imagine a person who bought a visa for 25000SAR to work in KSA and on the other hand he also signed for being of a illiterate Saudi who can even right his name and becomes the boss of 100's of people and suck their blood.

Muhammad (S.A.W) abolished this practice and what Saudis did they reincarnate this evil system.


But i do feel happy and laud if they finish this stupid system.

 

[AZADPAKISTAN2009]

Taxing expats under spotlight

By RIYADH: ARAB NEWS
Published: Mar 30, 2012 23:56 Updated: Mar 30, 2012 23:56

The long pending issue of imposing income tax on foreigners would come up again for discussion at the Shoura Council on Sunday. The finance committee of the Shoura has recommended carrying out fresh studies on imposing tax on all foreigners working in both public and private sectors in the Kingdom, Al-Riyadh newspaper reported yesterday.

The new proposal was made by Muhammad Al-Quwaihes, member of the Shoura, who presented it as an additional recommendation attached to the annual report of the Department of Zakat and Income Tax, which had already been discussed by the Shoura.

According to Al-Quwaihes, levying income tax on foreigners would be helpful in further boosting the ongoing Saudization drive. “Foreigners working in the Kingdom transfer about SR100 billion to their countries of origin annually.

The government is neither levying a single riyal in tax or Zakat on their remittance nor do they need to pay any kind of taxes,” he said.

Al-Quwaihes noted that most of the countries in the world impose income tax on individuals who work and earn money in those countries. “It is high time to impose income tax on foreigners. It is also to be noted that foreign workers are beneficiaries of all government support and subsidies given to utility services and products such as water, electricity, wheat, and petroleum products,” he said.

Nearly a decade ago, the Shoura Council reviewed the possibility of imposing taxes on foreign workers but later the proposal was put on the shelf. There are eight million foreigners in the Kingdom, an overwhelming majority of them working in the private sector.

Both Saudi and expatriate employees working in the Kingdom had to pay income tax until it was abolished in 1975. Later, there were moves to reintroduce income tax on foreigners in late 80s. However, in 1988, King Fahd scrapped the plans.

At present, only Saudi citizens and Saudi companies need to pay Zakat of 2.5 percent annually on profits and on the assessable amount for individuals, in addition to a 45 percent tax on foreign investors.

In a bid to attract more foreign investment into the Kingdom, the government slashed, in 2004, the tax rate imposed on foreign investors from 45 to 20 percent.

© 2010 Arab News

Taxing Foreign workers is ok , but they failed to consider that USA , Canada or UK or other European countries also pay the workers on same pay scale as a local worker

`There is equality of Pay`

In Saudia or Middle east , a work will be done by American consulting company and a worker would be paid in millions considering high hoursly rates

While a Pakistani / Indian / Banhali etc would be paid may be 2,000-3,000 / riyals a month

So you can't compare 80,000 USD - Euro / Annual Salary vs 16,000 Riyals and then also impose a Tax on it

If Taxes are to be imposed

Also Foreign countries , when you pay Tax they give you a slip , which you can take to your own country and don't have to pay National Tax again , your home country extracts Tax from country you worked at automatically

Common in Free Trade countries

 

[Mosamania]

Taxing Foreign workers is ok , but they failed to consider that USA , Canada or UK or other European countries also pay the workers on same pay scale as a local worker

`There is equality of Pay`

In Saudia or Middle east , a work will be done by American consulting company and a worker would be paid in millions considering high hoursly rates

While a Pakistani / Indian / Banhali etc would be paid may be 2,000-3,000 / riyals a month

So you can't compare 80,000 USD - Euro / Annual Salary vs 16,000 Riyals and then also impose a Tax on it

If Taxes are to be imposed

Also Foreign countries , when you pay Tax they give you a slip , which you can take to your own country and don't have to pay National Tax again , your home country extracts Tax from country you worked at automatically

Common in Free Trade countries

Shoura: No taxes on expats - Arab News

 

[Al Bhatti]

Saudi prepares law to end sponsorship

The sponsorship system of foreign workers in Saudi Arabia could end soon if a draft law prepared by the Ministry of Labour is adopted, a report said.

The draft law will be submitted to the Council of Ministers in the next few months for final approval, a source was quoted as saying by the Saudi Gazette.

An agency affiliated to the ministry will be created to look after foreign workers.

The legislation will prevent employers from holding the passports of their employees. It will also strip the sponsor of the power of issuing an objection letter which currently prevents employees from bringing their families or visiting their relatives in other regions of the kingdom, the report said.

It also proposes the issuing of a mandatory insurance policy to guarantee the financial rights of employers and employees. The policy is also meant to cover the payment of employees’ financial entitlements for at least six months.

The insurance also covers employees’ ticket fares in case of the deportation of the employer. Employers are also covered for risks such as theft, cheating, embezzlement, breach of confidentiality and any other damages incurred by employees, the report said.

Saudi prepares law to end sponsorship
---------------------------------------------------------------------------------------------------

No more Kafeeeeeeeeeeeeeeeeeeeeeeeeeeeeeel. Yes for Saudi Arabia fixing its own backyard and moving forward.

OMG KSA is moving forward in such a fast rate it is unbelievable.

The Kafala system will not be gone completely but surely they are trying to make the kafala system more better than it is now. The journey starts with a step.

I also heard that the shifting of the weekends from Thursdays and Fridays to Fridays and Saturdays has again being presented to the Shura Council for approval.

 

[Al Bhatti]

Instead Kuwait, Bahrain, Oman and UAE are one step ahead which allows foreigners to establish trade in their own name with minimal capital. The future is returning to the same all major corporations with cover the Saudi market from UAE or Kuwait or Bahrain.

In GCC, UAE has maximum number of Free Zones and it is also one of the very few GCC members (1 or 2 probably) having Free Trade Zones.

 

[killerx]

Its a good gesture but not sure if people deserve that or not!!

yes they do bro you what are you thinking