09/20/2019, 10.19
SAUDI ARABIA
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Nearly 2 million foreign workers flee Saudi Arabia

In the last 30 months the number of economic migrants has fallen by 20%. Behind the crisis a tax regime that is too high and an economy in difficulty. In the second quarter of 2019 at least 132 thousand people have left. Riyadh has introduced targeted taxes on foreign employees and austerity measures.

Riyadh (AsiaNews / Agencies) - In the last 30 months the number of foreign workers in Saudi Arabia has fallen by over 20%, due to a high tax regime and an economy that shows the first signs of difficulty. This is what emerges from a report published these days by the Saudi Jadwa Investment company, from which it emerges that the kingdom has lost 132,000 economic migrants in the second quarter of 2019.

A constantly decreasing trend that leads to the total figure of 1.9 million workers who fled Saudi Arabia since the beginning of 2017. In percentage terms the collapse is around 22% in just under three years.

The number of foreign workers in the public and private sector has gone from 8.55 million at the end of 2016 to 6.66 million at the end of June 2019. On the other hand, in the same period examined by the study the number of domestic workers, servants and private drivers increased by 33% to reach 3.1 million.

The total population of Saudi Arabia is 33.4 million inhabitants, a third of whom are foreigners. The kingdom's economy, which produces about 10 million barrels of oil per day, was marked by the fall in crude oil prices starting in the second half of 2014.

This led to a decline in gross domestic product (GDP) in the following years, which fell to its lowest point in 2017 with a paltry + 0.7%, and then rebounded to 2.3% the following year. Even for the next few years, despite the government interventions, the forecasts are not rosy.

For the experts, this slowdown has led to the closure of many small companies, combined with the dismissal of thousands of workers in large companies. However, the study prepared by Saudi Jadwa Investment shows that the flight of economic migrants is also due to the numerous taxes that have been introduced since January 2018 specifically for foreign workers.

Since July 2017, Riyadh has imposed a monthly tax on the immigrants for each employee ranging from 100 riyals (24 euros) to 400 riyals (96 euros) for 2020. The following year there was the introduction of an annual fee, which forced all Saudi companies that employ more foreigners than locals to pay about 400 riyals per employee in 2018 and up to 800 (193 euros) in 2019. In the face of a budget deficit for the sixth consecutive year, the largest exporter Black Gold World introduced a series of austerity measures: among others, the suspension of subsidies for petrol and electricity and the imposition of a 5% VAT.

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