The announcement was in response to social media chatter that those earning more than SAR3,000 (£590, $800, €667) each month would have to pay 10% in tax, reports newspaper Saudi Gazette.
Ministry spokesperson Khaled Aba Al-Khalil said: “There is no truth in these reports. There is no intention at all to impose new tax on expatriates.
“Whatever social media is circulating about the new tax on expatriates is totally untrue,” he added.
The rumours come six months after the Saudi Government introduced a levy on expat dependants, whereby expats have to pay of SAR100 to the government each month per dependent.
The tax will increase by SAR100 each July before levelling out at SAR400 in 2020.
The social media rumours also claimed that recruitment and the issuance of work permits for 60 job roles will be stopped and these roles will be limited to Saudis.
In addition, companies would be asked to replace expats currently working in those roles with Saudis.
This was also denied by Al-Khalil, who confirmed that there are only 19 jobs restricted to Saudis and that “there is no change”.
This year, however, will herald some changes for foreign workers in Saudi, with the duration of expat employment visas expected to be cut in half to just one year.
Additionally, companies in Saudi with expat employees face higher work permit fees as of this month.
Previously, private companies were charged SAR200 per expat employee where they outnumbered Saudi or Gulf Cooperation Council (GCC) workers. From 2018, the levy on all expats will gradually increase, in a bid to encourage companies to hire more Saudis.
Where there is an equal or lower number of expats compared with Saudi/GCC workers, companies will pay SAR300 per month per employee, rising to SAR500 in 2019, before hitting SAR700 in 2020.
When the number of expats exceeds Saudi/GCC employees, companies will be charged SAR400 per month. This will rise to SAR600 in January 2019 and increase a year later to SAR800 per month.