Fees on expat remittances ‘not a solution’, in KSA

Keeping the remittances free of fees will also enhance foreign investors’ confidence in the Kingdom. (Supplied)
Updated 10 September 2018
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Fees on expat remittances ‘not a solution’, in KSA

  • The Kingdom is home to more than 10 million foreign workers who in 2017 sent almost $38 billion to their home countries

JEDDAH: The Saudi government is not expected to impose fees on the remittances of foreign workers despite a related proposal submitted to the Shoura Council to discus the subject.
Dr. Mohammed Al-Abbas, an economic analyst, told Arab News that the proposal was made even before the last drops in oil prices.
“Long ago, foreign workers’ remittances went as high as nearly SR150 billion ($40 billion). Since then media has called for the imposing of fees on such remittances. At that time there was no tendency to impose dependent fees on expats,” Al-Abbas said.
He added that the only discussion circulating then was whether to impose fees on remittances or not.
Al-Abbas, who is also a member of the Shoura Council, explained that the main point behind that idea was to preserve the country’s financial reserves. “As you know, when an expat worker sends money to his country, the process should go through major currencies, especially the dollar. That means banks change riyals with dollars. That way, dollars are sent outside the Kingdom. This, of course, drains our reserves of hard currency,” he said.
For that reason, Al-Abbas continued, a proposal was made to curb such remittances for the sake of alleviating pressure on our reserves.
Asked if the move would add to the national economy, he said: “I do not want to anticipate events, but I can say, from my own point of view, and this is just my personal opinion, imposing fees on foreign workers remittances was not feasible in the past, nor will it be a major solution, as such remitting processes can be made through a variety of channels,” he said.
He further explained that when an expat pays all his taxes regularly to the government, you could not then stop him from doing any lawful action. This is one of the rights that the regulations of Kingdom have guaranteed him. He added that it is not acceptable to ask a foreign worker who is committed to paying taxes to pay for his remittances. “The Kingdom’s rules are always based on justice and fairness,” he said.
Al-Abbas believes that the move will not work as a solution to national economic issues, such as unemployment. “I do not think such a project will even have a good impact on the national economy, in that it will not contribute to reducing unemployment rates,” he said.
Al-Abbas added that the project would not help to reduce the shadow economy. The experienced analyst thinks that the move would only cause harm to foreign laborers.
He said that the project, if approved, will have negative consequences on foreign investments in Saudi Arabia. He also noted that the countries of these foreign workers would reciprocate. “They will do the same and impose fees on Saudis living or working in their countries. This normally happens in global economic policies,” he said.
He pointed out that the project is still a proposal that might be discussed at the Shoura Council, and the latter may agree on the suggestion or not. “So far nothing is official about that,”
Furthermore, Al-Abbas said that imposing such burdens would also make it hard to control capital mobility smoothly and fairly, and might be a barrier to capital movement. “The most important point here is to efficiently control our banking system if we want things to go the way we like. Here is the point we should work on. The Saudi banking system is strong enough to detect any tax evasion attempts,” he said.
He gave an example, saying if a foreign worker tries to remit big amounts of money, he will be questioned as: “Where did you get that amount from?” In case he was found not paying tax, tough legal measures will be taken against him. “These measures can be as harsh as expropriating his whole money if he fails to disclose its source,” he said.
Another important issue that Al-Abbas highlighted is to support the Ministry of Trade’s great efforts in fighting cover-up (tasatur). He said that it would be better if we focus on these two matters rather than imposing more fees on foreign workers.
Saudi Arabia’s Ministry of Finance has earlier denied reports that it was planning to impose fees on the remittances of foreign workers.
The ministry said it was committed to supporting the free movement of capital through official channels in accordance with international standards and practices. The statement was issued in response to “baseless and unfounded reports” by some media outlets.
The Kingdom is home to more than 10 million foreign workers who in 2017 sent almost $38 billion to their home countries.
The ministry said keeping the remittances free of fees “will also enhance foreign investors’ confidence in the Kingdom’s economy and financial systems.”
The ministry said it had already denied rumors of charging expats for their remittances in January 2017.


Investigation into alleged mistakes in Yemen find coalition forces acted properly

Updated 17 January 2019
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Investigation into alleged mistakes in Yemen find coalition forces acted properly

JEDDAH: The Joint Incident Assessment Team in Yemen (JIAT) has investigated four allegations made by international governmental and non-governmental organizations and media about mistakes made by coalition forces while carrying out military operations inside Yemen.
JIAT spokesman Mansour Al-Mansour said that the team concluded that the procedures followed by the coalition forces were proper and safe, taking into consideration the rules of engagement, international humanitarian law and the coalition’s own rules.
Team members visited a number of cities in Yemen, including Aden, Lahj and Khor Maksar, during the investigation and spoke to witnesses, victims and their families to gather evidence and establish the facts.
In one of the incidents that was investigated, coalition warship fired on and destroyed a craft in the waters off the Yemeni port of Al-Khokha in September. Al-Mansour said that after examining documents and evidence JIAT had concluded that an alliance ship was escorting and protecting a flotilla of three Saudi merchant ships when, in an area off the port of Al-Khokha, a boat was spotted approaching the convoy at a high speed from the direction of the Yemeni coast.
The escort ship followed the accepted rules of engagement by repeatedly warning the unidentified vessel, using loudspeakers, not to come any closer. When these went unheeded, warning shots were fired but the boat continued to approach.
“On reaching an area that represented a threat to the convoy, the protection ship tackled the boat according to the rules of engagement and targeted it, resulting in an explosion on the boat,” said Al-Mansour. “The protection ship continued escorting the convoy. After the escort task was completed, the protection ship returned to the site of the targeted boat to carry out a search-and-rescue operation for the crew of the target boat but no one was found.”