The exempted contractors include those currently working on projects scheduled to be completed after 2018, reports newspaper Saudi Gazette, citing Arabic newspaper Al-Watan.
Since July 2017, expats working in the Kingdom are required to pay the Saudi Government SAR100 (£21, $27, €23) each month per dependent.
This includes wives, sons, daughters, parents, wife’s father or mother, house workers, and drivers who are registered under the name of a sponsor, usually where expats work for commercial companies.
The levy will increase by SAR100 each July, before plateauing at SAR400 in 2020.
Additionally, expats will have to pay the new levy in advance if they leave the Gulf state for a holiday. Under Saudi’s visa system, expats leaving the country must pay an exit and re-entry fee for themselves and their family members.
This has now been extended to include the new expat tax, which means those leaving the Kingdom must also pay the levy in advance for the months remaining on their residence permits.
The exemption was granted after the Council of Saudi Chambers approached crown prince Muhammad bin Salman, deputy premier and minister of defence and head of the Council of Economic and Development Affairs (CEDA).
The Council requested a review of the proposed expatriate workers’ tax from the crown prince. It argued that the decision could disrupt the workflow and seriously affect the budget of public projects.
It also said the disruption could delay Vision 2030, an ambitious blueprint for the country’s long-term goals launched by the crown prince in April 2016.
Vision 2030 includes 80 projects, each costing between $3.7m and $20m (£15.5m, €17m), aimed at reducing Saudi Arabia’s dependence on oil, diversifying its economy and developing service sectors.