MANAMA: Saudi Arabia's Shura Council has turned down a proposal to tax foreigners on the money they make in the kingdom.
"The Council heard views from those who supported the proposal and those who opposed it," Mohammad Bin Abdullah Al Ghamdi, the Council's secretary-general, said.
Several members said that the recommendation to tax expatriates in both the private and public sector was not appropriate at a time when Saudi Arabia is engaged in development activities, he said, quoted by Saudi news site Sabq on Sunday.
Those who supported it argued that its application would narrow the gap between the salaries of Saudis and non-Saudis and would boost the employment of Saudi nationals.
Last week, Shura Council Member Mohammad Al Qouwhis said that his tax proposal would help create more jobs for Saudis as recruiting foreign workers would cost more.
According to Al Qouwhis, foreigners did not pay zakat, the mandatory alms for the needy in Islam, and their remittances last year were over SR100 billion, Saudi Gazette daily reported.
He added that foreigners benefitted from subsidized services and essential consumer products.
Nine out of the ten jobs in the private sector are held by expatriates.
In January 2003, the Shura rejected a proposal to impose an income tax on expatriate workers whose monthly salaries exceeded SR3,000, arguing that it was inappropriate to levy taxes on the salaries of non-Saudis regardless of their amount, the Saudi daily said.