Saudi Govt imposes 'Dependent Tax'; Population of Indian expats dwindles
By TIOL News Service
NEW DELHI, JULY 24, 2017: FISCAL tools are worldwide used to achieve varied objectives. One may generally tend to think that they should strictly be used for mobilising resources for the treasury but political think tanks often lean on them to realise political goals. Saudi Arabia is no exception. To ensure diversity in its immigrants population and reduce unemployment among its own youth it has opted for an innovative fiscal tool if any expat is earning well and also keeping one's familiy.
From the fiscal 2017 (July 1) it has begun to impose 'Dependent Tax' on immigrant population. What persuaded it to opt for such a tax is the plummeting crude prices since 2014, hurting its fortune in a big way. The tax rate is SR 100 (Rs.1,700 approx.) per month on each dependent. The same will be increased to SR 200 in 2018, SR 300 in 2019 and SR 400 in 2020 per dependent member of the expatriate family.
As per the data published by Ministry of External Affairs, it has been observed that in the year 2015, a total number of 3,06,642 Indian workers were working under the Saudi Government which has now dropped down to a total count of 32,995. Futher, in near future the annual increase in tax would adversely impact the resident Indian families working overseas.
The Indian expats include not just the blue collar workers, but also the doctors, nurses, engineers, architects, bankers, executives. India's young workforce looks toward the Middle East and the Arabian kingdom has been one of the most attractive employment destinations so far. But it seems all such opportunities may finally turn into an 'Arabian mirage' if the state of economies in the Middle East continues to deteriorate and fatricidal wars continue to 'burn' their economies.
Meanwhile, the MEA has received several suggestions to extend the facility of Emigration Check Not Required (ECNR) and to open more POE offices in U.P., Bihar, Dehradun and North East States and to synchronize skill development initiatives with overseas employment.
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