The Shoura (Consultative) Council Sunday rejected a proposal to study the long pending issue of imposing income tax on foreign workers in the Kingdom. A majority of members voted ‘ayes' to put down the proposal after it was put to vote following heated discussions. The rejection of the proposal, made by Muhammad Al-Quwaihes, member of the Shoura Council, would definitely be a cause of cheer for about nine million expatriates in the Kingdom. Participating in the debate, several members said the proposal was untenable at this stage due to the Kingdom's development requirements in different sectors and specializations. Those supporting the proposal contended that taxing the expatriate workers would narrow the gap between their salaries and the wages of Saudis and thus increasing job opportunities for Saudi workers in the private sector, Dr Muhammad Bin Abdullah Al-Ghamdi, Secretary General of the Council said after the meeting. According to Al-Quwaihes, levying income tax on foreigners would be helpful in further boosting the ongoing Saudization drive. But, some members did not see the Saudization process getting any worthwhile impetus from the proposed measure. 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. Way back in January 2003, the Shoura Council rejected plans to impose income tax on expatriate workers whose salaries exceed SR3,000 per month. The Council then decided that it was inappropriate to levy taxes on the salaries of non-Saudis regardless of the amount of their pay. As regards the issue of collecting Zakat on plots of land meant for commercial purposes, Al-Ghamdi said the Council decided to wait for the the outcome of a study on the subject by a sub-committee. In the day's another business, the Shoura approved two draft memorandums of understanding on strategic dialogue between the GCC member states and Pakistan and Australia. The Council also listened to the views of its Housing, Water and Public Services Committee on the annual report of Al-Ahsa Drainage and Irrigation Authority for the fiscal year 1431-32H. The Council completed discussions on a report of the Committee of Security Affairs on the proposed draft rules of the Saudi Commission for Academic Accreditation and Assessment.
