RIYADH — The government is currently considering to allow expatriates to invest in free trade against an annual income tax of about 20 percent, business daily Al-Eqtisadiah reported on Sunday.
A number of transactions were limited to the Saudis, which gave rise to the phenomenon of tasattur (doing business in the name of Saudis against certain fees) that has caused the national economy to lose billions of riyals.
According to informed sources, the concerned authorities are currently conducting studies to impose two types of tax on the expatriates. The first one will be on the accounts the expatriates may present including revenues, expenditure and profits.
The second will be on the estimated profits in case no dividends are announced. In his case, the tax will be fixed according to the area of activity. It will be 15 percent on the sector of contracting and about 25 percent on consultancy services.
According to the sources, the new procedures will enable the expatriate to be his own sponsor without the need for a Saudi kafeel (sponsor) after obtaining the license to invest in any free trade area such as workshops, catering, contracting and others.
Minister of Commerce and Investment Majed Al-Qasabi has said the ministry was making an in-depth study to put an end to the practice of tasattur including allowing the expatriates to practice trade openly against certain taxes. “The expats will no longer need to hide behind a Saudi to practice trade,” he was quoted as saying.
An official source at the General Authority for Small and Medium Enterprises said a study to combat tasattur was completed. He said the expatriates would be allowed to do commercial business without the need to do this in the name of a Saudi citizen.
He said there was complete coordination with the concerned authorities to issue the rules and regulations that would guarantee the rights of the investor whether being Saudi or non-Saudi. “The study will soon see the light,” he added.
According to market sources, about 200,000 cases of tasattur were discovered in the Kingdom over the years including 86,000 in the contracting and 84 in retail sectors. They said the ministry last year alone referred about 450 tasattur cases to the Bureau of Investigation and Public Prosecution.
Source : http://saudigazette.com
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