Saudi Arabia imposes heavy family tax on dependents; burden forces lakhs of Indians to return

What makes the burden even heavier for Non-Resident Indians is the fact that the family tax will increase every year for each dependent until 2020, taking the net sum to 400 riyals per dependent for each month.

Riyadh, June 21: Saudi Arabia has decided to impose a family tax of 100 riyals per dependent per month on expatriates. The “dependent fee” will be implemented from July 1 and is expected to pose a financial burden on the over 41 lakh Indian families living in that country.

As per today’s exchange rate, the 100 riyals fee amounts to Rs 1,723 for each dependent. This would mean, that for a family of 4 with one working member, an amount of Rs 5,169 would have to be paid to the Saudi government. In addition, families are required to pay the entire sum in advance if they wish to renew their resident permits.

What makes the burden even heavier for Non-Resident Indians is the fact that the family tax will increase every year for each dependent until 2020, taking the net sum to 400 riyals per dependent for each month. The impact of such a heavy duty has already affected lakhs of Indian expatriates, forcing them to return back home.

Speaking to the Deccan Chronicle, Riyaz, an Indian worker in Saudi Arabi commented on the situation and said, “From July, I have to pay SR 3,600 per annum on dependent visas, apart from paying for my children’s education. I’ll be spending half my salary on dependent visas. Next year, the visa charges go up to SR 7,200, in 2019 it will be SR 10,800, and in 2020 it will be SR 14,400. My salary is SR 2,000 per month now, and I may get an increment of SR 500 in 2020. I’ll be spending half my salary on dependent visas. Most workers like me will have to send their families back to India. I can’t even imagine the situation of workers earning less than I do.”

Similarly, Mohd Yousuf Ali told the TOI, “Hundreds of people have already sent their families away to India because of the dependent fee. They had to rush so that their children could take admissions in schools back in India.” The report also quotes a senior official from the Ministry of External Affairs as having stated that the ‘dependent fee’ would influence all expats.

The number of jobs made available to non-citizens in Saudi Arabia has seen a rapid decline with crashing oil prices. Thousands of Indians were laid off and even had to face severe food shortage due to an extreme financial hardship. The Indian embassy and consulates had stepped in to distribute food packages to Indian workers.

While regular instances of wages for blue collar workers not being paid regularly emerge in Saudi Arabia, job opportunities in  IT, construction and health care have remained relatively stable attracting the Indian workforce. However, with the imposition of the family tax and the subsequent return of NRIs, the Indian economy is expected to feel the impact of the excess labour force.