A Shoura Council committee has proposed that foreigners be taxed on the money they earn in the Kingdom. Muhammad Al-Qouwhis, a Shoura Council member, said his income tax proposal was adopted by the Council's finance committee. The committee has proposed a study on the matter. Al-Qouwhis was quoted Friday in a section of the Arabic press as saying that his proposal would apply to foreigners working in both public and private sectors. He said he also submitted an additional memo on the issue. He said that more jobs will become available for Saudis if it becomes more costly to recruit foreign workers. Al-Qouwhis said the remittances of expatriates was over SR100 billion last year. He added that foreign workers in the Kingdom do not pay any Zakat (mandatory individual offering for the needy in Islam). He said most governments impose income tax on persons working in their countries. It was high time the Saudi government did the same because foreigners are benefiting from subsidized services and essential consumer products. Expatriates account for nine out of 10 private sector jobs in the Kingdom. They fill roles that range from domestic service and factory work to management positions in large finance companies. The value of their remittances has increased in the past five years from an officially recorded SR15.3 billion in late 2006. The true figures for money outflows were probably much higher because they did not include informal transfers. Most of the money is thought to be remitted by lower-paid workers who frequently carry cash with them on trips home rather than making formal bank transfers. Higher-paid workers tend to spend more of their income inside Saudi Arabia because they are more likely to bring their families with them. In January 2003, the Shoura rejected plans to impose an income tax on expatriate workers whose salaries exceed SR3,000 per month. The Council decided that it was inappropriate to levy taxes on the salaries of non-Saudis regardless of the amount of their pay.
