The Finance Ministry and the Saudi Arabian Monetary Agency is considering a new proposal that would see remittances sent overseas limited to how much someone earns, national paper Arab News has reported.
The government has also unveiled plans to introduce a controversial 6% tax on the remittances sent abroad.
Early warning sign
The move raises concerns the Saudi government is trying to stem the flow of money leaving the Kingdom in the wake of oil slump facing the world’s biggest crude exporter.
According the publication, Saudi authorities will use information from bank accounts to compare remittances to an expat’s earnings as part of a crackdown on tax avoidance or undeclared income from “concealed, even criminal actions”.
“They said the new regulation, now under consideration, will be launched soon and will contribute to limiting labour market irregularities and violations that increase the illegal income of expatriates,” said the newspaper.
Despite the measures being aimed at the country’s large low paid workforce, often made up of migrants from South Asia, there are fears it is a precursor to capital controls being imposed across the Middle East on wealthier expats looking to take their money out of region.
Economic slump
Latest figures from the first quarter of the year show that the Saudi Arabia’s economy expanded at its slowest rate since 2013.
In June, the government unveiled its National Transformation Plan, which sets out how the Kingdom plans to increase non-oil revenue over the next five year, while slashing government spending.
On Monday, Fawwaz Al Khodari, the head of Al Khodari & Sons, Saudi’s only publicly traded building firm, told The National Business that the nation’s construction industry has shrunk by as much as 80%.
Widespread reports of unpaid wages prompted the Indian government to step in this week and hand out food to more than 10,000 Indian workers after being laid off by construction firm Saudi Oger, with many claiming they hadn’t been paid for months.
The Indian government is now putting in place a plan to evacuate a large number of Indians from the oil rich countries, said foreign minister Sushma Swaraj.
