Saudi contractors to be reimbursed for expat labour levy
Saudi firms have to pay $640 per expat worker employed since November 2012
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The Council of Ministers in the Kingdom of Saudi Arabia (KSA) has announced compensation for small and medium-sized enterprises (SMEs) and contracting firms in the country for the expat worker levy of $640, which they have had to pay since November 2012.
A ministerial committee has been set up to study the compensation to be paid to firms which signed contracts with the government prior to the commencement date of the levy, November 15, 2012.
Contracting firms which presented their offers without considering the expat levy to be paid for each foreign worker. The compensation will be equal to the amount paid in expat levy, but will be distributed after contracted work has been completed, labour minister Adel Fakeih said.
SMEs employing nine workers or fewer have also been exempted from paying the annual expat levy for four foreign workers. Fakeih said SMEs were exempted from the levy upon the condition that their Saudi owners will work full-time for their firms.
“The decision offers SMEs a greater opportunity to develop their business activities,” he told Arab News.
As of March 2014, over 50% of small and medium sized contracting firms had gone out of business in the Saudi Arabian construction market at the end of the country’s labour legalisation period.
Contractors were found unable to complete their projects on time and had requested the Ministry of Labour to grant them exemptions that aid their project completion deadlines.
“The shortage in manpower and ever-increasing wages will remain the biggest challenges facing the contracting sector,” Fahad Al-Hamadi, head of the National Contractors Committee at the Council of Saudi Chambers said.
