Gulf Expats Feeling The Pinch As Jobs Face The Axe

Lisa Smith, BA (Hons), CeFA

Gulf State governments are continuing to crack down on expats as falling oil revenues wreck their budget plans.

In Oman, hundreds of expats face a debt trap as companies and government departments axe contract workers to save money.

The unforeseen consequence of the policy is landlords are refusing to release expats from tenancy agreements.

In Oman, the standard rental agreement for a house is 12 months, but employers are only offering six month contracts and many are not renewed.

This leaves expats with six months of rental costs to clear before they can leave the country.

Although Omani property law allows three or six-month tenancy agreements, landlords are reluctant to sign them as municipal charges and tax are triggered each time the contract is renewed, reducing their profits.

If the tenant signs a 12-month contract and leaves early, under Omani law, they are responsible for paying up the whole contract.

Redundancy fear

Redundancies are a constant fear for expats working across the Gulf region.

Online recruiters GulfTalent have revealed 45% of firms in Saudi Arabia and 15% of employers in the United Arab Emirates are considering job cuts during 2017.

On average, one in four employers are expecting to slash jobs this year – down from 40% last year.

“Saudi Arabia is an exception to the overall positive trend due to its higher dependence on oil revenues,” said the report.

Although oil and gas companies are downsizing following a continuing worldwide price drop, the biggest recruiters are healthcare (up 55%) and banking (up 44%).

“With the economic outlook more stable, some are taking the opportunity to fill specialist vacancies that were left unfilled last year due to hiring freezes. Furthermore, most banks are actively expanding their collections departments to keep a grip on rising levels of loan defaults,” said the report.

Construction looks like having a second bad year, with 45% of firms looking to reduce staffing, compared with 55% last year.

Zero tax status lost

The Gulf States are about to lose their zero-tax status with expats as Saudi Arabia officially ratified the introduction of 5% VAT across the region in a bid to raise some revenue to repair damaged official budgets.

All Gulf nations have agreed the tax.

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