Saudi Arabia's new expat tax will go into effect on July 1st.
The tax, which affects expatriates and their dependents, will be paid annually when a residence visa is sent for renewal or when a new visa is being issued.
Set at a monthly SAR100 ($26) for each individual, (a rate expected to increase gradually every year until 2020,) the new levy will affect the lives of millions of non-natives living in the kingdom.
So what do they think of it? We spoke to a few expats and here's what they told us.
"What other option is there?"
Speaking to StepFeed, A.K., a construction foreman and expat who has lived and worked in Saudi Arabia for the past eleven years said:
"By now, we've accepted the fact that we'll have to respect and adhere to this new tax. What other option is there? We work here, our livelihoods depend on this and we're going to have to follow every new rule issued if we want to keep working here."
When asked how the new tax will affect him and his family, A.K. explained that it's going to take a toll.
"Because my three children and wife live here with me, the amount I am going to have to pay annually will certainly take a toll on us. I already pay rent, school fees, and so many other expenses out of my own salary and I now have to add this to the list," he said.
A.K. stressed that the new tax law will also have an effect on private companies like the one he works for.
"We still have no idea how private companies are going to deal with this. Are they going to compensate their employees for the annual tax, we don't really know yet," he added.
Unaffordable for many
Another expat, S.H., who lives in Saudi Arabia along with his family also spoke to StepFeed and explained how the new tax is going to affect him.
"With all the economic reform programs that the kingdom launched in recent years, we sort of anticipated this move. However, we didn't expect that it would take effect so fast," he said.
S.H. explained that while he understands the country's need to introduce new levies amid significant global drops in oil prices, he still worries about how expats will adjust to them.
"I work as an engineer, my salary is therefore considered above average when compared to other expats. This is the only reason why I find the current annual tax sum quite reasonable and affordable. For other expat workers, including those who work in construction, it's absolutely not," he said.
"It's the country's right to impose taxes"
W.K., an expat engineer and entrepreneur who has lived in the kingdom for over 25 years, saw the new tax coming.
"Given the fluctuation we've been witnessing when it comes to oil prices, this was expected," he said.
"I know that many expats see this as an added burden on their lives, and it is. However, we need to understand that it's the country's right to impose taxes when necessary," he added.
While the experienced entrepreneur has a mostly positive outlook on the imposition of the new tax, he also has comments on its drawbacks.
"Everything I said doesn't mean there aren't any drawbacks, because there are, especially for low-income families. I also think the new levy is going to take a toll on private companies and independent entrepreneurs," he explained.
"I am worried they're going to keep increasing until we're driven to leave"
A.F., a young accountant who has lived in Saudi Arabia for the past four years, explained that he's only going to be able to afford the new tax if he continues to have no dependents (wife/children) attached to his residency permit.
"Let's be honest, most expats live and work here because the pay we get is excellent compared to salaries back home. Before I heard of the new tax, I even wanted to bring my family here. But now, I don't think I'll be able to afford that in the long run," he said.
A.F. also went on to express a concern shared by all expats who spoke to us: More tax hikes over the next three years.
"My problem isn't the amount we're going to have to pay this year or the next, but it's what we'll have to pay in three or four years from now. I heard that there's going to be a continuous, gradual increase in the amount of taxes imposed on expats in the future," he said.
"Paying an annual tax that's somewhere close to $319 per person is one thing, paying $1000 or more is another. I am worried they're going to keep increasing until we're driven to leave," he added.