01:1401:1401:14Family tax forces thousands of Indian expats to return from Saudi Arabia

Rude shock

(With inputs from Chethan Misquith, Shrinivasa M and Manu Aiyappa Kanathanda)

BENGALURU: Muhammad Irshad works as a business development coordinator with an engineering company in Mangaluru. It isn’t as well-paying as the one he had a couple of months ago, but then he is thankful that he at least has a job.Unlike Irshad, 30, many other friends, relatives and acquaintances, who were forced to return from Saudi Arabia after the introduction of the expatriate dependent fee in July last year, are struggling to find viable jobs. Ever since the fee, also known as expat fee and family tax , was introduced, thousands of Indian migrants who were either working or staying in the Gulf country have been forced to return home. Most of these expats are from coastal Karnataka, especially Bhatkal and undivided Dakshina Kannada and the fee ate into their earnings. Until the introduction of the fee, a bid to boost Saudisation — the move to get more of its citizens to work, while controlling legal foreign workers and weeding out illegal ones — Saudi Arabia was a taxfree country.“For a majority of Indian workers, the new tax is unaffordable and has forced many to either return or, at the very least, send their families back home,” Irshad said. His father owns a dress shop in Deralakatte, while his mother is a housewife. He has three siblings — two brothers and a sister. Both brothers were employed in Saudi Arabia, but like Irshad, one has returned.Irshad lived with his wife and two children in the kingdom. The dependent fee is linked to iqama (residence permit) and Irshad paid Saudi riyals (SR) 300 (about Rs 5,500) per month last year. This year, the fee would have doubled which is why he decided to return for good.Although the expat fee is a tax, Irshad, who began working in the kingdom 10 years ago, insists it is a fine since, he argues, the Saudi government does not provide any benefit for the money paid.According to one estimate, at least 500 of the total 1,200 families in Gulf countries have returned from Saudi Arabia alone and are looking to rebuild their lives from scratch. Most of these families are in the middle and low income group. These are now stressful times and many families are staring at uncertainty and unaffordability. Many hope that like the Kerala government, the Karnataka government too will lend help and support.Working in the Gulf was seen as lucrative and over the last three decades, hundreds of people mostly from Dakshina Kannada, Kodagu and Bhatkal from the state migrated to Saudi Arabia. Many of them settled there.The expat levy, however, came as a bolt from the blue. The fee was proposed in the Saudi budget last year 2017 to shore up the country’s sagging revenues in the wake of the decline in global oil prices.From July 2018, the dependent fee has doubled to SR 200 per person per month. The same levy will increase to SR 300 from July 2019 and SR 400 from July 2020. For example, the fee worked out to Rs 5,500 for a month in the first year for a family of four. From this year onwards, the fee would double to Rs 11,000 (at SR 200 per month) and triple next year.This is huge considering a clerk earns about SR 5,000 (Rs 92,000) and a construction worker SR 2,500 (Rs 46,000).An auto consultant in Saudi Arabia, who wished to remain anonymous, says the dependent fee is a massive burden. “Even if people can pay, they prefer to send their families home since they have to pay the Saudi government for nothing,” he said, adding it wasn’t just the low income group which was sending families back home. “Even families with a decent income are doing it. The same money can be remitted back home.”KD Poorvika (name changed) stayed with her husband and daughter in Riyadh for four years before returning to Mysuru with their daughter after the new tax was imposed.“My husband works for a university in Riyadh and he cannot afford to leave at this stage,” she said. “I am a qualified teacher so I managed to find a job in Mysuru. But, many of my friends who had returned with me are still struggling to find a job.” She wanted the government to step in and devise a policy to help those returning home.Irshad says the push for Saudisation has crashed the real estate market in the kingdom and cites his own experience as an example. He says he stayed in a 2BHK house in Al Khobar for which he paid an annual rent of SR 19,000 (Rs 3,48,460). However, the rent has now dropped to SR 13,000 (Rs 2,38,420).