Autumn reveals the behind-the-scenes story of canceling the financial compensation for industry
Minister of Industry and Mineral Resources, Bandar Al-Khorayef, affirmed that the government's decision to abolish the financial levy imposed on expatriate workers in industrial establishments represents a fundamental turning point and a key pillar for enhancing stability in policies related to industrial investment in the Kingdom of Saudi Arabia.
Speaking at a session of the eighth Riyadh Industrialists Council, Al-Khorayef revealed the behind-the-scenes details of this historic decision, explaining that Crown Prince Mohammed bin Salman, the Prime Minister, was the primary supporter and driving force behind this initiative. The minister noted that the Crown Prince possessed a comprehensive and detailed understanding of all aspects of the industrial sector and its challenges during the meeting where the decision was made, and that His Highness led the discussion to ensure the decision was adopted decisively and with utmost speed.
Unprecedented speed and a decision to pass
In a noteworthy detail regarding the decision's issuance, Al-Khuraiji explained that it was announced with unprecedented speed due to its paramount importance. He added that no cabinet meetings were scheduled immediately following the budget announcement, and therefore the decision was made through a "passage" mechanism; this reflects the leadership's commitment to promptly addressing any steps that would support the industrial sector and remove obstacles for investors.
Ending the state of anticipation and boosting investment
The Minister of Industry explained that this cancellation directly helped resolve the hesitation of many investors who were awaiting clarity on the government's stance on this issue before committing their capital. He affirmed that the decision gave these investors the green light to proceed with their investment decisions with greater confidence, thus enhancing the attractiveness of the industrial investment environment in the Kingdom.
Context of the decision and its economic dimensions
This decision culminates a series of government initiatives aimed at easing the financial burden on the industrial sector. In 2019, the government decided to cover the fees for expatriate workers in industrial establishments for five years, with the goal of improving the performance of factories and enabling them to compete. Today's decision to permanently cancel these fees confirms the sustainability of this support and puts an end to concerns about rising operating costs that had been troubling industrialists.
This trend reflects the clarity of the Kingdom's Vision 2030 regarding the industrial sector, which is a cornerstone of economic diversification. The National Industrial Development and Logistics Program (NIDLP) aims to transform the Kingdom into a leading industrial power, increase the non-oil sector's contribution to GDP, and boost Saudi exports to global markets.
Expected impact: Jobs and competitiveness
Eliminating the financial levy is expected to reduce production costs for Saudi factories, thereby enhancing their competitiveness against imported products in export markets. This direct support will also stimulate expansion in existing factories and attract new foreign and domestic investments, ultimately contributing to the creation of thousands of high-quality job opportunities for citizens and achieving the sustainable economic development sought by the leadership.
