RIYADH — The Ministry of Labor has denied social media reports that it is going to exempt private sector firms from paying the annual levy of SR2,400 for each surplus expat worker. The decision to impose the annual levy was issued by the Council of Ministers in its meeting on Nov. 21, 2011, which authorized the Ministry of Labor to collect the fees, the ministry said in a statement carried by the Saudi Press Agency on Tuesday. The policy, which took effect on Nov. 15, 2012, makes it mandatory for private companies with a majority of foreign staff to pay SR2,400 a year for each expatriate worker. Last July, the Cabinet gave partial exemption from the levy to small and medium-sized enterprises (SMEs) with nine or fewer workers, the Labor Ministry clarified. Initially, smaller firms were exempt from the Nitaqat Saudization program, but they were finally included in Oct. 2012 (with a requirement that they must hire at least one Saudi), with the expatriate levy introduced a month later. However, the levy and jobs quota system hit SMEs disproportionately, and by August 2013 the Ministry of Labour revealed that 341,000 SMEs in the Kingdom (or 35% of all SMEs) still did not currently employ a single Saudi national. The concession announced by the Cabinet exempted SMEs from having to pay the expatriate levy for four of their foreign workers, albeit only for companies that are Saudi-owned. Many workers are exempt from the rule. They include domestic servants, foreigners with Saudi mothers, and citizens of other Gulf Cooperation Council members. It was announced that the Kingdom needed to create three million jobs for Saudi citizens by 2015 and six million by 2030.
