Saudi finance ministry denies plans to tax foreign remittances

Saudi Arabia’s Ministry of Finance On Monday denied plans to tax the remittances of foreign workers.

The statement to Saudi Press Agency came in response to reports of a proposal to tax transfers, the ministry said.

“The Ministry of Finance denies this in detail, and confirms [its] commitment to support the free movement of capital through official channels according to international standards and practices,” the ministry said.

A similar denial was issued in January 2017 and the Shoura Council subsequently rejected a remittance tax proposal.

Read: Saudi Shoura Council rejects proposal to tax expat remittances

The kingdom’s second larger bank, Al Rajhi, said last month that its remittance business could be hit due to the recent exodus of foreign workers.

Read: Saudi’s Al Rajhi Bank says expat exodus could impact its remittance business

Government data showed 234,000 foreigners left their jobs in the first quarter and 277,000 in the final quarter of 2017.

Read: Saudi unemployment rises in Q1, 234,000 foreign workers leave jobs

Despite this, remittances were flat in the first half, increasing 0.1 per cent from SAR71.02bn ($18.93bn) to SAR71.06bn ($18.95bn).

Read: Saudi expat remittances down in June, flat for first half

The Kuwaiti parliament’s financial affairs committee approved a draft law to tax foreign remittances earlier this year despite warnings from the central bank.

Read: Kuwait MPs to discuss remittance tax amid central bank warnings