Saudi Arabia will cover certain 'expat fees' for private companies

Expat residents will still have to pay taxes on behalf of their dependents.

In January 2018, Saudi Arabia implemented a bill that forces private companies to pay a fee for every foreign worker they employ. The move came as part of the kingdom's Vision 2030 and a governmental strategy aimed at raising non-oil revenue and encouraging companies to hire Saudis. 

That same bill failed to work since local businesses - accustomed to cheaper foreign labor which means increased expat employment - couldn't adapt to the fees and still manage to balance their profits. What worsened the issue further is that the expat employee fee was imposed at the same time subsidy cut laws and a value-added tax went into effect. 

In a bid to rescue companies that are unable to keep their financial standing, the kingdom's cabinet announced that the state will temporarily cover the cost of the mandatory fees for licensed industrial companies over the next five yearsThe move is set to cost the government around 29.75 billion riyals (nearly $8 billion).  

The move comes after a previous reform failed to solve the issue

Source: Kremlin

The fees proposed under the original scheme amounted to 300 riyals ($80) for every work permit. They were set to increase to 600 riyals ($160) in 2019 and 800 riyals ($213) in 2020 per expat employee, Al Arabiya reported. 

However, hundreds of institutions struggled to even cover the 300 riyals per permit fee. This, in turn, led to King Salman approving a $3.1-billion plan to ease the levies, though it didn't fully end the problem. 

Saudi employers said the fees eventually contributed to an "exodus of foreign laborers, hitting the economy without making much of a dent in Saudi unemployment."

The industrial employee fee is different than the fees expats have to pay

The fee the Saudi state will now be helping companies pay off is not related to the fees expat residents have to pay on behalf of their dependents. Therefore, the change announced on Tuesday only affects costs that were supposed to be paid by businesses on behalf of their foreign workers. 

Fees and taxes to be paid by expats and their sponsors will continue to be applied in the kingdom. One such fee is an annual one paid by every expat when their residence visa is sent in for renewal or when they need to issue a new visa. 

The sum goes straight to the state treasury and starts at a monthly 100 riyals ($26) for each individual. This amount is expected to increase gradually until 2020. 

Group of men jailed for forcing minors to work as prostitutes in Dubai

"They asked me to have illegal affairs with three customers per month," one of the victims said.

Prostitution rings have been busted numerous times in the past in Dubai. Two years ago, police rescued a 14-year-old girl from what was described as the cruelest human trafficking case of 2017. Months ago, authorities arrested three men for forcing a 17-year-old to work as a prostitute. 

Despite the ongoing arrests against individuals involved in such exploits, human trafficking prostitution cases are still quite common in the emirate. Most recently, five men were sentenced to jail by the Dubai Court of First Instance for trafficking a group of minor girls and forcing them into prostitution. 

The Bangladeshi nationals, aged between 20 to 39, allegedly flew out four teens from their home country to work as dancers and prostitutes at a night club in Al Muraqqabat area, a locality in the eastern part of the emirate. Police in Dubai had received a tip a few months ago regarding one of the teens working as a dancer in the nightclub, which is owned by one of the defendants, according to Gulf News.

Police eventually raided the nightclub and found 19 women and busted the five men involved in the ring. 

"All the women were working as dancers and prostitutes. Four of them were under the age of 18," an Emirati policeman said, according to Gulf News.

"We raided the place and rescued the victims who were referred to a women's children's shelter in Dubai. The defendants brought the victims using passports with fake ages." 

One of the victims, a 17-year-old Bangladeshi national, testified that she had agreed to come to Dubai to work as a dancer to financially support her family back home. 

"After four days of arriving in the country, they took us to the nightclub and told us that we will work as dancers. They asked me to have illegal affairs with three customers per month. The first defendant is the manager of the nightclub and he was running the business," she said.

The five defendants have been charged with human trafficking and will be deported after having served time in prison. 

Not the first case of human trafficking in the UAE

In 2017, a human trafficking and prostitution ring - involving a 27-year-old Bangladeshi security guard and other unknown persons - was busted after one woman sent her brother a message via WhatsApp. 

The woman, identified as a Kyrgyz national, was one of two who were lured to Dubai after the security guard offered them jobs as domestic helpers and forced them into prostitution shortly after being picked up from the airport. They were only able to escape after the police busted the ring with the help of the message one of the women was able to send to her brother in her home country, Khaleej Times reported.

Human trafficking laws in the UAE are strict

Emirati law stipulates a minimum fine of 100,000 dirhams ($27,223) and a minimum of five years in prison for human trafficking. The penalty could reach a life sentence if the victim is a child or a person with special needs.

According to the law, "human trafficking includes all forms of sexual exploitation, engaging others in prostitution, servitude, forced labor, organ-trafficking, coerced service, enslavement, begging and quasi-slavery practices."

The UAE has been working to combat human trafficking through legislative amendments as well as awareness programs. In 2015, the Dubai Judicial Institute and the United Nations Office on Drugs and Crime launched an anti-trafficking diploma, which teaches employees investigative skills, along with methods to protect and rehabilitate victims. As a result, the number of human trafficking cases in the country dropped from 25 to 16 between 2016 and 2017, according to The National.