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Showing posts with label Dependent Tax. Show all posts

Thursday, July 20, 2017

KSA: These Expats Are Exempted From Paying Dependent's Fees

It's been three weeks since the Dependent Fee has been implemented for Saudi Arabia Expatriate workers who brought their families to live with them. Now it is becoming clearer on who are supposed to pay, and who are exempted from paying the dependent fee. Remember that the fees amount to SR100 per family member per month, but the payment must be done annually and in full. Once paid, it cannot be refunded as well, in case your family members go out of the country. Finally, the amount increases by SR 100 every year, up to 2020 where it will be SR 400 per dependent member per month.

This has caused many expats sending their families back home. But hope emerges for a certain few expats as more details emerge. A tweet in arabic has shown a list of expats exempted from paying the dependent fees. See it below. Here are the confirmed lists of expatriates exempted from paying dependent fees:

Scroll below for the list in English - as well as the explanations.

An expatriate who is married to a Saudi Citizen:

A citizen's wife and children are exempted from the dependent fee. Widows and divorced women who were married to a Saudi Citizen are also exempted. However, it is not clear if this remains true if the woman married an expat after her Saudi husband dies or is divorced.

In case where the Saudi citizen is the mother, the child is still exempted.

Long-term Residents

Expatriate dependents who have stayed in Saudi Arabia for most of their lives are also listed as exempted from the dependent fees. The requirement is that they must not have traveled to any country outside the kingdom for the last 40 years!

Foreign Students

Foreign students who are currently studying in Saudi Arabia are exempted from paying dependent fees. To clarify, these are students whose visa states that they are in the kingdom as students. These do not include children sponsored by their parents and are merely studying as well.

Expatriates Working in the Government Sector

Expats whose sponsors are a part of government are not required to pay the dependent fees.

This is most welcome news for many OFWs since many Filipinos are working in the different Saudi government hospitals, schools and offices.

To further verify the news, we asked some OFWs to check their banking information - if it indeed shows no requirements for dependent fees. See the screenshots after the video.

Also, employees who are working in the government sector, but were supplied through a private contractor are not exempted.

Expats whose Iqama, the residence card, are registered as employed by the government sector, will see "zero" in their dependent fee inquiry when using online banking.

Another bank shows a similar message, but with "error" attached. Dependent fee amount is zero for government sector employees.

While the Saudi Government has full rights to craft and implement their own policy, the effects of these policies cannot be easily controlled. The dependent levy is expected to enrich the kingdom's coffers, but what about the effect to the local market. Some economists argue that the gross outcome of the move will not be beneficial at all for the national economy because in the first year after the imposition of the new tax at least 1 million expats, 75 percent of them dependents, are likely to leave the Kingdom. These 1 million foreigners used to spend their money inside the Kingdom to purchase goods and services, pay rent as well as some ministry fees like exit/re-entry visas. Now, they will send 50-80% of their salaries back home, reducing liquidity in the local market.

Whatever the policy may be, both Saudi nationals and expats hope for a brighter future for the Kingdom of Saudi Arabia.

sources: Saudi Gazette, Gulf Business

Kuwait Newspaper Insults Duterte Many Times, Depicts President As Butcher, Insane and a Terrorist

A Kuwait-based newspaper is taking flak from netizens when pictures of its editorial cartoons featuring the Philippine President Rodrigo Duterte made rounds in the internet. The Kuwaiti Times editorials paint the highly popular leader in bad light. He was depicted in various personas such as a butcher, an insane person, a murderous villain and a moronic terrorist. The images below are arranged in chronological order. The dates when the images were published are shown so you can check Kuwait Times' website to see for yourself. May 7, 2016 The editorial cartoons begin innocently enough showing President Duterte as a fighter casting his ballot for the Presidential Elections of 2016. May 10, 2016 - Election Day Upon winning the elections, President Duterte makes it again in the editorial cartoon section. This time, the Kuwait Times' shows the President pointing a gun and trash-talking some "punk," while what seems to be blood is seen in the bottom left corner. August 29, 2016 Things get malicious with Kuwait Times as they portrayed a leader of an independent nation as a butcher, about to hack the Philippines in the form of a bloody piece of hanging meat. September 27, 2016 The President is depicted wearing slippers, with his mouth, both hands and a foot "holding" a gun. A text bubble implies that Duterte is frustrated for not being able to kill all drug dealers, a statement so far from reality. October 11, 2016 The Kuwait Times mocks President Duterte again, this time along with US President-Elect Donald Trump. The paper depicts the two world leaders as a pimple on the face of a globe. The Kuwait Times editor seems to disagree about the populist views that helped elect both Duterte and Trump into office. October 24, 2016 Misinterpreting the President's statements on addicts, the Kuwait Times editors insulted the still popular leader, depicting him as an insane person in an asylum, complete with a straitjacket. President Duterte has since apologized to the Jewish community regarding the misunderstood statement. February 01, 2017 While not directly attacking the President, the newspaper wrongly depicts the Philippine Government's war on drugs as war on the poor. The image shows a member of the Philippine National Police shooting a stray dog dead. The editorial also insults Filipinos, depicting them as dogs. Clearly, the editors of this newspaper are not conducting enough research before publishing their work. March 04, 2017 As the Philippine lawmakers are debating the reinstatement of death penalty, the Kuwait Times editors cannot help but poke fun at the Philippine President. It depicted Duterte trash-talking the bullet-riddled body of what could only be assumed as a criminal. Around the guys neck is a noose, as the paper's editors wanted to lay all extra-judicial deaths to the President. It is ironic that a paper from Kuwait will criticize the leader of an independent country regarding death penalty, when their own country of Kuwait executes more people than most other countries except for a few. April-30-2017 Not happy with depicting the Philippine leader as an insane person, the Kuwait paper repeats the insult, this time pairing Duterte with Trump. The editorial mischievously draws Duterte and Trump as two crazy blabbermouths who have so much in common. The two are shown wearing straitjackets. May 30, 2017 At the height of the Marawi Crisis, while other countries were offering their support to the Philippines, the Kuwait-based newspaper ups its malicious depiction as it publishes a malevolent piece of editorial cartoon likening the Philippine President with other Islamic militants, and making the insult one step higher by labeling Mr. Duterte as a moron. What do you think of the Kuwait Times? Do you agree with their assessment? Do you think the editor-in-chief should make a public apology? What about the "artist" who's supposedly done the drawings, should he lose his job? Tell us what you think! Please comment and share this article! DISCLAIMER: All editorials were taken from Kuwait Times website, they own the rights to it, but they DO NOT have the right to insult our President! If you agree with me, drop them a message here >>> Kuwait Times Facebook Page.

Qatar's Riyal In Trouble? Qatar Central Bank is Trying To Keep Its Value Up

Reports are coming in that numerous banks and currency exchanges outside Qatar are refusing to deal in Qatari riyals amid the ongoing diplomatic spat in the Gulf. Several Qatari nationals and residents traveling in Europe, the US and Asia have contacted news agencies saying they have been unable to exchange Qatari currency in the countries they were visiting. However, not all banks in all countries are affected. Exchanges in Jordan and Lebanon, for example, are still operating normally. Many exchange houses in the Gulf reportedly stopped accepting riyals early on in the crisis, and just last week, global institutions have followed. Among countries confirmed as having orders to avoid the currency include the United States, UK, Thailand, India, Sri Lanka, Pakistan, and the Philippines - the last four having a significant number of expat workers in Qatar. The governments of some of these countries deny that there is an official order to refuse trade in Qatari riyals, however, there is also no memo to say that the banks and exchanges cannot refuse either. In early June, Qatar's Gulf neighbours Saudi Arabia, UAE, Bahrain and Egypt ceased air, sea and land links with the country, which has been accused of funding terrorism. Qatar denies the claim. One effect of the diplomatic crisis in the gulf region is that the Qatari riyals is now unprofitable for many banks. This is because the currency recently depreciated against the US dollar, which it has been pegged to since July 2001. The Qatar Central Bank (QCB) attempts to keep the riyal fixed at around 3.64 per dollar. But it recently reached 3.76 – its weakest level on record. The Post Office, one of the UK’s main operators of currency-exchange services, said it took the decision to “temporarily” stop trading in riyals on June 5. Other UK foreign exchange services ceased trading Qatar riyals from 21 June. The currency is no longer available for sale or buy-back across branches of Barclays, RBS, Lloyds Banking Group and Tesco Bank. However, currency supplier Travelex said trading in riyals had only been suspended in some markets due to "business challenges" and that it announced it has resumed purchasing Qatar riyal globally. Western Union and UAE Exchange have issued responses that they will continue to trade in Qatari riyals. For the millions of foreign workers in Qatar, transferring money back home is also taking longer because new routes are being found. The increasing volatility of the currency outside the country also means that the income of foreign workers are becoming smaller as the value of the riyal falls. But the The world's biggest liquefied natural gas exporter has huge dollar reserves with which it could use to defend its currency against devaluation. The Qatari central bank declared in the early hours of June 10 that it would guarantee all dealings for customers inside and outside Qatar. However, expat workers are still affected. An an example, two exchange houses in Dubai said they would buy 1,000 Qatari riyals for only 710 or 720 UAE dirhams – far below the 970 dirhams which they offered before the crisis. That is a 25% loss in value. Are you an expat working or living in Qatar? Have you had similar experience in dealing with banks or exchange rates. Please comment and let others know.

How Much Will You Save Under President Duterte's Tax Reform Program?

TRAIN: Tax Reform Acceleration and Inclusion. This is a Tax Reform program initiated by the Duterte Administration, to change the old tax system in the Philippines and make it simpler, more fair, and efficient. The current tax system in the Philippines is both complex and unjust. TRAIN will change this, by reducing personal income tax, simplify estate and donor tax, expand Value-Added Tax coverage and increase oil and automobile excise taxes. Let us look at each of these components. PERSONAL INCOME TAX The proposed Tax Schedule under TRAIN will benefit 99% of the taxpayers. That's more than the percentage of voters who chose Duterte to be President. Based on the table below, the new tax rates will increase take-home pay of most workers and increase the purchasing power of the family or individual. Also, all bonuses not exceeding P100,000 will stay tax-free! Also, by 2020, the tax rates will be even lower. The current income tax rate in the Philippines is actually higher than most of its neighbors. Information gathered showed that Filipinos pay the 2nd highest tax rate in the Asean countries, with also a lower income threshold. This table shows that if you earn P500,000 in Singapore, you don't have to pay income tax. In the Philippines, that's 32% rate. Compare that to Indonesia, where you pay 30% only if you earn three times more than in the Philippines. In Thailand, you pay 35% rate, but only if you earn 11 times more than in the Philippines. Let us see some projected calculations and comparisons of present and proposed tax rates based on worker's salaries, from minimum wage earners to a call-center agent. ESTATE TAX and DONOR'S TAX TRAIN proposes that Estate Tax be fixed at 6% of the estate's net value. There will also be a standard deduction of P1 million and exemption of up to P3 million for family homes. This means that for inheritance with value below standard deduction, and for family homes valued at less than the exemption, no estate tax shall be paid. Only inheritance of rich families will be taxed. A similar scheme is applied for Donor's Tax. A single rate of 6% of the net donations for gifts above P100,000 yearly, will be applied. This is regardless of relationship. VALUE ADDED TAX This part of the TRAIN is least understood and often misrepresented by many. Actually, the VAT system in the Philippines has the most number of exemptions (people, companies, cooperatives and other institutions exempted from paying VAT). TRAIN will expand the tax base by limiting exemptions to necessities - raw food, education, and health. Cooperatives with gross sales of more than P3 million pesos will not be exempted from VAT. Only smaller cooperatives and those that produce raw agriculture products will be VAT exempt. Among the previously exempted entities that will need to pay VAT are: Domestic shipping importation power transmission low cost and socialized housing (if value is more than P1.5M for lots, P2.5M for house and lot) lease of residential units (with monthly rent of over P10,000/month) boy and girl scouts other entities exempted via special laws. This will raise more funds for the poor and vulnerable. Senior Citizens and Persons With Disabilities will still enjoy exemptions. OIL EXCISE TAX Oil excise will be raised by P6 gradually over three years. The rates will be adjusted yearly after the third year. The last time the oil excise tax was adjusted was in 1997. Increasing the petrol price via excise tax will not necessarily affect the savings of the majority. In fact, fuel consumption is higher for the wealthiest Filipino. Take this graphic below: The graphic above shows that the top 10% wealthiest Filipinos use more than half of the fuel for vehicles. The poorest 10% only use 0.6%. The middle group use only about 5%. This means that the wealthiest will be affected more by the price increase in petrol. AUTOMOBILE EXCISE TAX The tax rates for cars will be increased, more for luxury cars than basic cars. This makes the wealthier people pay more tax than the middle class. The wealthiest are the ones who usually buy or own more than one car. An example of computation is shown below: One of the main concerns of the public is the effect of the increased taxes on goods and transportation costs. The government however believes that the net savings for each worker will be greater due to the lower income tax. Also, a percentage of the revenues will be allotted for the poorest Filipinos to help them keep up with any price increase. President Duterte's Tax Reform agenda is vital to the improvement of lives of the Filipino, one that the President vowed to leave behind after his term of office. The current tax system is already 20 years old. If passed into law, the comprehensive tax reform bill is estimated to raise (P)162 billion in net revenues every year. This is vital for the advancement of the economy. The Tax Reform Acceleration and Inclusion program is vital to President Duterte's ten-point socioeconomic agenda. The revenue will be used to improve existing infrastructure and accelerate building new one, providing jobs and better services to people and help move the economy forward. Note: The values and tax rates stated herein are subject to change because the bill on tax reform has not been approved yet in the senate.

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Sunday, June 04, 2017

Companies Start Collecting Dependent's Fee For Saudi Expats

In December of 2016, the Saudi Government has unveiled their 2017 Budget. It was a time of great upheaval in the kingdom as the price of oil remains very low and the government is losing money everyday. The budget was, by any account, revolutionary. As the Saudi Government works overtime to balance their declining finances, they started to look at other sources of income outside the oil industry.

Among the "new" sources of income is the imposition of new fees to the massive population of expatriates in the kingdom. One such levy is about to be implemented next month.

The Dependent's Fee is a 100-Riyal monthly fee levied for each dependent of an expatriate worker. It means, an expatriate worker (or his employer?) should pay an annual fee of SR1200.00 for EACH dependent living with the employee in the kingdom. The amount is said to be collected annually during Iqama (residency card) renewal. In 2018, the amount will double, then triple in 2019. By year 2020, the Dependent's Fee would be four times, or SR400 per month!

A page from the Fiscal Balance Program - Balanced Budget 2020

OFWs in Saudi are starting to share the information that their companies are giving out memos to expatriate workers regarding the Dependent's Fee. Expatriates have sent images of such notices to friends and relatives using What's App or FB Messenger. Most pictures taken does not show the company logo, perhaps to avoid a backlash from the employer, but some contain the company logos, which gives more credence to the report.

Check out the images below so you can judge for yourself. We have tried several times to verify the story, but knowing the Saudi Government, any official announcement regarding this issue is done only via the Ministry of Interior.

It is still unclear whether who will shoulder the new fees. While the Saudi Labor Law clearly states that employers must shoulder all costs and imposed fees related to hiring an expatriate worker, some companies split the cost with their employees. Many, however, simply pass the costs to their employers, taking-advantage of the workers lack of knowledge on local labor laws.

The number of OFWs with dependents in Saudi Arabia is currently unclear. One thing is for sure, if this plan continues, then their numbers will surely decrease.
As such, the Philippine government should also prepare for a surge of Filipino OFWs and their dependents, most of whom will surely go home in the next few years.

sources: ArabNews, Saudi Gazette

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