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.


KSRelief signs agreements for relief to Lebanese, Syrians and Palestinians

Updated 25 April 2019
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KSRelief signs agreements for relief to Lebanese, Syrians and Palestinians

  • Al-Rabeeah: We have no hidden agenda in Syria and we work through international organizations

BEIRUT: The general supervisor of the King Salman Humanitarian Aid and Relief Center (KSRelief), Dr. Abdullah Al-Rabeeah, signed on Wednesday seven agreements with Beirut and international and civil organizations operating in Lebanon to implement relief projects targeting Syrian and Palestinian refugees as well as the most affected host communities in Lebanon.

Lebanese Prime Minister Saad Hariri, who participated in the symposium at the Four Seasons Hotel Beirut to sign the agreements, praised the strong Saudi-Lebanese relations, which have existed for decades, and stressed Lebanon’s keenness to ensure their permanence and development.

He said: “The meetings Al-Rabeeah has held with different Lebanese political and religious authorities over the past two days during his visit to Lebanon, under the guidance of King Salman, indicate the Saudi leadership’s true desire to deepen the fraternal ties with the Lebanese, support Lebanon’s unity, independence, sovereignty and coexistence formula, and protect its existence from the repercussions of all the fires, crises and interventions that plague many countries.”

During the symposium, which was attended by a large group of political, religious and social figures, Al-Rabeeah called on the international donor community to shoulder more responsibility.

Addressing the implementing bodies, he said: “It is time to reconsider your working mechanisms in order to develop them and improve procedures to avoid negative impacts.”

“What I mean by reconsidering working processes is that there is a need to work professionally and skillfully because there are not many resources, and we must eliminate bureaucracy and speedily make the most of resources,” Al-Rabeeah told Arab News.

He stressed the importance of developing a close partnership between the donor and the implementer of projects, highlighting that KSRelief’s work is subject to international and regional oversight mechanisms as well as its own internal control mechanisms.

“We have two strategic partners, and when agreements are signed with the recipients of assistance, this means accepting oversight terms,” he said.

Al-Rabeeah said: “Saudi Arabia supports the safe return of Syrian refugees to their country, and so is the case for Yemen.”

“Saudi Arabia has supported peaceful dialogues, which restore security and stability,” he said. “In order for this to happen in Syria, we support the efforts of the United Nations and implement (as KSRelief) relief programs inside Syria. We also have major programs and we count on the UN to ensure a safe return for Syrian refugees.”

On the Syrian regions in which KSRelief is implementing its programs and the difficulties faced, Al-Rabeeah told Arab News: “We have nothing to do with military or religious matters, and wherever there is security, we work. We also work through the UN and the international organizations inside Syria, and we do not have any hidden agenda in this field.”

He stressed that “participating in rebuilding Syria requires security and stability, and the Saudi leadership hopes for a peaceful solution as soon as possible. Until this is achieved, the relief work will continue and won’t cease.”

Al-Rabeeah announced that KSRelief is implementing a quality program to rehabilitate recruited children in Yemen alongside its education, protection, health and environment projects.

“There are those who recruit children to fight in Yemen, violating all humanitarian laws. Our center rehabilitates them so that they are not used as terrorist tools in the future,” he said.

Al-Rabeeah emphasized that Crown Prince Mohammed bin Salman’s Vision 2030 has given relief work its share, especially in terms of volunteering programs. “We have great examples involved in the field,” he said.

Among the signed agreements was one with the Lebanese High Relief Commission (HRC) to carry out a project to cover the food needs of Lebanese families.

Chairman of Lebanon’s High Relief Commission Maj. Gen. Mohammed Khair told Arab News that the agreement targets distributing 10,000 food rations to orphans, widows and destitute families in the poorest and most disadvantaged areas in Lebanon. “This project is encouraging and gives hope to people,” he said.

Khair said that there are 100,000 people in need in Bab Al-Tabbaneh district alone, pledging to commit to transparency during the implementation of the project. “It is not a question of sectarian balance; we are focused on those who are most in need,” he said.

The signed agreements include one for repairing, equipping, and operating the Prince Nayef bin Abdul Aziz Center for Dialysis at the Makassed General Hospital, an agreement with the UNHCR worth $5 million to implement a project for assisting the most affected Syrian families for six months, an agreement to support Souboul Assalam Association in Akkar (northern Lebanon), an agreement with the International Organization for Migration (IOM) to implement a project worth $3.8 million to cover the needs of Syrian families that are below the poverty line for a year, and an agreement with UNRWA to cover the medical needs and treatment of cancer and multiple sclerosis in Palestinian refugee camps in Lebanon.

UNRWA Commissioner-General Pierre Krahenbuhl said: “The challenge facing UNRWA after the reduction of its budget is maintaining the operation of its 715 schools in the Middle East.”

“Saudi Arabia is a key partner for us, and owing to its help, we will be able to help cancer and multiple sclerosis patients,” he said.