Saudi Arabia cancels foreign worker levy for licensed industrial facilities

Alsharq Tribune-Otaify 

Saudi Arabia has officially cancelled an expatriate levy on foreign workers employed at licensed industrial facilities, a move aimed at supporting the sector's sustainability and global competitiveness, the Saudi Press Agency reported on Wednesday.

Industry and Mineral Resources Minister Bandar Alkhorayef said the decision underscored continued government support for industry and would help boost competitiveness and expand the reach of non-oil exports in global markets, SPA said.

Alkhorayef noted that since a temporary exemption from the fee was introduced in 2019, the number of industrial facilities has grown to more than 12,000 from 8,822, while industrial gross domestic product has risen to over 501 billion riyals (85.9 billion U.S. dollars) from 322 billion riyals.

The levy, a monthly charge paid by businesses for each foreign employee, was introduced in 2017 to encourage the hiring of Saudi nationals and generate non-oil revenue. However, it proved a burden for private-sector firms, particularly in manufacturing and construction, key pillars of the kingdom's Vision 2030 economic diversification drive.

Before its suspension in January 2020, the fee ranged from 300 to 700 riyals per worker per month when expatriate staff did not outnumber Saudi employees, and from 400 to 800 riyals when they did.

The measures are in line with Saudi Arabia's ambition to become a global industrial hub and to triple industrial GDP to 895 billion riyals by 2035, Alkhorayef said.