2023-12-01 12:22:43
Riyadh: It has been decided to impose a levy on small firms with less than ten employees from March 2024. The Ministry of Manpower and Social Development has announced that the earlier levy exemption will not be extended to establishments with less employees. The Saudi cabinet had announced an exemption till Sha’ban 15 (February 25).
After another three months, the employer is obliged to pay the levy on behalf of the employees of small firms to renew the iqama. Earlier, the levy exemption was allowed for three years for companies with less than ten employees. Last March, when the deadline was about to expire, the Saudi cabinet extended it for another year.
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The levy on foreigners was introduced as part of a policy to strengthen indigenization. The levy was waived to ease the burden on Saudi nationals running small businesses and to keep them in the market.
There is a condition that the owner should be registered with GOSI (General Organization for Social Insurance) for exemption only if the establishment is run by a native. Levy was collected from employees under unregistered owners.
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If the owner is a Saudi national registered with Gozi, two foreigners will get the levy. They just need to pay 100 Rials for Labor Card and 650 Rials for Jawasat to renew Iqama. Four foreigners are eligible for the exemption if the company employs another Saudi national. But for this too, Saudi workers must be registered with Gozi.
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By the first half of 2023, it is estimated that 65 lakh people are working in small and medium enterprises in the country. 99.5 percent of the total enterprises belong to the small and medium category. In the first half of this year, the highest number of establishments were registered in Riyadh province. 41 percent of the total registered in the country are in the capital city. Makkah and Dammam provinces are in second and third place.
The number of small and medium enterprises in the country has increased due to the assistance received from the government. A growth of 37 percent was recorded in one year. From 75,300 firms in the first quarter of 2022, it rose to 11,90,000 in the first quarter of 2023.
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