Saudi Arabia: Expats seek fair work contracts

Thursday 20 December 2012

Expatriates are calling for fair contracts that specifies a minimum wage and payment of iqama renewal fees, insurance premium and a foreign labor fee recently imposed by the Ministry of Labor by the employer.

The labor ministry decision to impose the fee of SR 2,400 on expat workers have forced them to look for better contracts. Some expatriates who have contracts that do not include iqama renewal and insurance fees will not be able to pay the new foreign labor fee.

A report issued by the IFC, World Bank and Price Waterhouse Coopers says Saudi Arabia has the world’s third least demanding tax framework for corporations.

After studying 185 world economies, the report said companies in the MENA region pay a total average tax of 23.6 percent, compared to a global average of 44.7 percent.

Corporations in the GCC make 17.6 payments per year and spend on average 158 hours dealing with regulations. Other GCC nations that ranked high include Bahrain at No. 7, Oman at 10 and Kuwait at 11.

Mohammed Rahman, a Pakistani accountant at a private company in Jeddah said: “All countries worldwide are suffering from inflation, while the salaries of residents and expatriate workers are decreasing. In Saudi Arabia, most private sector employees, especially expats, are still earning below-average salaries. The new Labor Ministry foreign labor fee of SR 2,400 is not covered in my work contract. I am wondering who will pay these taxes? Do I have to pay or does my company pay?”

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