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.


Cirque du Soleil prepares ground-breaking show in King Fahd Stadium

Updated 21 September 2018
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Cirque du Soleil prepares ground-breaking show in King Fahd Stadium

RIYADH: A joint press conference between the MBC Group, the General Entertainment Authority, and Cirque du Soleil was held at King Fahd Stadium on Thursday afternoon to answer media questions and give some details about Cirque du Soleil’s upcoming special performance, part of Saudi Arabia’s 88th National Day celebrations. The show is slated to be one of the biggest performed by the Cirque and their first in Saudi Arabia. It is a one-night-only, exclusive event, designed especially for this occasion.
Daniel Fortin, vice president of Creation at Cirque du Soleil, teased the audience with a few details of the upcoming show. “With a cast and crew of over 300, this is one of the biggest shows we’ve ever done,” he said.
“Without giving too much of the plot away, the story is centered around the sun, and takes place from sunset to sunrise. Everything from the costumes to the stage props was created as a homage to Saudi culture. You’ll see a lot of Bedouin influences in the staging and in the music. We drew inspiration from a variety of sources, such as traditional Bedouin tents, desert scenery, even the stadium itself.”
The show has been in development for six months, and the cast and crew have been preparing for the show at the King Fahd International Stadium since the beginning of August.
The show will contain new technology, and 16 unprecedented acrobatic acts. However, Fortin refused to share too many details. “You’ll just have to see what we have planned at the show.” He said. “But I think you will be impressed. We’re doing things we’ve never done before.”
Tickets to the show sold out in less than 48 hours after their release; an incredible feat as the show has allocated more than 27,000 seats for the performance. Abdulrahman Al Khalifa, spokesperson for the General Entertainment Authority, was pleased— but not entirely surprised— by the public’s reaction to news of the show. “We felt that variety in the types of events we brought to Saudi Arabia was important,” he said, “and we conducted a number of research workshops to determine what sort of events would be well-received by the public. Cirque du Soleil was mentioned frequently in our research, so we’re very happy to have had the opportunity to bring them here.”
MBC head of events Omar Al Radi also expects a big response to the televising of the show, which he estimates will break records. “We’re broadcasting the show live on both our local and international channels, such as those in Europe and in America.” he said.
“We’re expecting over 200 million views. Probably record-breaking numbers. MBC is proud to have been part of bringing this historic event to Saudi Arabia, and we can’t wait for you to see it.”