(MENAFN - Arab News) Saudi banking experts and economists are keen that officials should strive for mobilizing more foreign investments and impose taxes on such investors rather than on expatriate workers.
They gave their opinion in the wake of the Shoura Council's rejection of the proposal for taxing the expatriate work force.
Arab News spoke to number of business leaders and banking experts and they were of the view that the Kingdom's need for more foreign investments for furthering its economic growth was paramount.
"The Kingdom's economy cannot be boosted by taxing expatriate workers. This will be a retrograde step. We have to think out of the box and create a more congenial environment for foreign investments," said Nahed Taher, founder and CEO of Gulf One Investment Bank.
Taher said she would prefer the Kingdom's different sectors to collaborate and plan more innovative strategies to facilitate the inflow of investments from all over the world.
Saudi organizations are competing with each other only in a limited number of traditional fields like construction, trading, building and retail. "We need to attract foreign investors, especially those coming from the Arab Spring countries, to invest in information technology and recycling, two of the many high potential areas. Many investors from these and other affected countries including Syria and Lebanon prefer to come to the buoyant and stable Saudi market for making profit."
So, she added: "Why not open the door for all such regional investors and give a thrust to the business scene with focus on small and medium enterprises (SMEs). They will definitely add value to the Saudi market, especially as they will come with their experience and expertise that the Kingdom could benefit from," she said. "We should increasingly focus on creating more business opportunities or new markets."
Nahed suggested that officials should start collaborating with countries like Malaysia and China for increasing their investments.
"We are lacking in innovation in several industries such as energy efficiency, industrial technology, and health care. East Asian countries are specialized in such investments and the Kingdom can benefit from them with their involvement in joint ventures and transfer of know-how. Such projects will have a two-fold advantage - creating business opportunities here and boosting the economies of Saudi Arabia and the partner countries. Expatriates and Saudis also will find many job opportunities with good salaries," she said.
Jamal Banoon, economist and business writer, said the Saudi economy will never get a boost by imposing additional fees on the iqama, sponsorship and salaries of overseas workers.
"If we want to boost the Saudi economy, we should focus on creating new projects and welcoming new innovative foreign investments rather than imposing additional taxes on expatriates," he said.
Banoon said foreign investors could also invest in projects in the holy cities of Makkah and Madinah, which are undergoing massive expansions.
"The two holy cities could be the venue for Islamic industries if we allow countries like Indonesia, Malaysia and Russia to direct their investments to these markets. Moreover, the Kingdom's petrochemical and solar energy sectors are so huge that they will continue to need more overseas investments," he said.
Banoon added that the Saudi economy could improve rapidly once lessons are learned from the euro zone debt crisis and the crisis created by Arab Spring.
According to the Committee of Foreign Investment at the Jeddah Chamber of Commerce and Industry, the number of licenses issued to foreign investors totaled 7,400, more than 4,000 in Jeddah alone, until the end of 2009, with an estimated value exceeding SR552 billion. "This means that having foreign investments and taxing such investments could be a healthy step for our economy," a committee member said.
"The taxes paid by overseas entities active in the Kingdom were estimated at SR7 billion. The Saudization rate in the Kingdom's overseas projects is about 27 percent," he said.