Saudi Arabia government introduced Saudization in its employment policies to control the high number of expatriates taking away jobs at the expense of the Saudi citizens. Most recently, the Saudi government revised the expat levy on the Saudization ratio. The new expat taxes we operational as from May 2017. These costs are largely expected to raise costs for the private sector. The impact is likely to be felt more on the labor-intensive sectors like retail and construction. Currently, the Saudi firms pay SAR200 levy per expat worker, and this figure is expected to double to SAR400. Every year to SAR800 in 2020. This paper explores literature and gathers evidence of the possible impact of the revised expat levy on the Saudization ratio.

KEYWORDS: employment, expat levy, average rate, income, foreign workers, private firms