Families of Indian expats to return as Saudi Arabia introduces ‘family tax’

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As Saudi Arabia prepares to introduce a monthly dependant fee from July 1, many Indian expats working in the Middle Eastern nation are planning to send their dependants back to India.

Expats working in Saudi Arabia will need to pay 100 riyals (about Rs 1,700) per month for each dependant to the Saudi government. Thus, a family of four (three dependants in the family) will need to pay 300 riyals (about Rs 5,100) per month. Indians currently form the largest expat group in Saudi Arabia and the tax could increase the financial burden on Indians and their families.

The tax is also progressive in that it will increase by 100 riyals for each dependant every year till 2020. The tax will need to be paid in advance for the entire year. Therefore, a family of four will need to pay 3,600 riyals or Rs 62,000 in advance for the year. With the Saudi government taxing a significant portion of an employee’s salary many Indians are sending their families back to India in an effort to avoid the tax even as some companies are including allowances for the fee in the salaries.