Saudi Arabia ‘family tax’: What is it? How will it affect Indians?

Indian immigrants in Saudi Arabia are set to be hit by the Kingdom’s newly introduced ‘family tax’ that will come into effect starting from July 1.

The tax requires employed persons to pay a fee of 100 riyals (Rs 1,700 approx) per dependent each month. So, an Indian expat living with his wife and two chidlren will require to pay 300 riyals monthly.

Additionally, the fee needs to be paid in advance as per regulations. This means that if a man’s dependant wife is to stay in Saudi Arabia for one year, a total of 1,200 riyals needs to be paid in advance at the time of the renewal of the residence permit.

To make matters worse, this tax is said to increase by 100 riyals each year per dependent till the year 2020.

How will it affect Indians?
The dependent fee is likely to be a huge financial burden for the 41 lakh Indians – the largest expat group in Saudi Arabia.

Many families have been forced to return to India or send back dependents because they can’t afford the fee, reports the Times of India.

While some companies have stepped forward to compensate their employees for the dependant fee, most people have to pay it themselves.

The Ministry of External Affairs confirmed that this move would affect all expats equally.

Besides the tax, cost of living in Saudi Arabia is going to increase drastically from July 1. Prices of beverages is set to go up by 100 per cent while tobacco products will be affected equally.

Further, job security is a major concern. Post the fall of crude oil prices, many Indian workers have been laid off with employees in other industries wary about staying back in the country.