JEDDAH: The Ministry of Commerce and Industry will launch a major nationwide campaign against cover-up businesses (tasattur) by the end of this year in light of the negative impact of this illegal practice on the Kingdom's economy and society.
Abdullah bin Darie Al-Anazi, director general of the department to fight tasattur at the ministry, said his organization would seek the assistance of citizens in combating this negative phenomenon that leads to the Kingdom incurring heavy economic losses.
While giving a lecture at Asharqia Chamber in Dammam, he emphasized the importance of the anti-cover-up law in protecting the national economy, adding that foreigners involved in illegal cover-up business transfer more than SR140 billion to their countries.
The law prohibits unfair commercial competition and commercial fraud by preventing expatriates from engaging in some business activities. The law helps prevent expatriates from establishing their monopoly in certain businesses, he added.
Al-Anazi said the law was enacted only in 2005 to regulate the business activities of expatriate workers in the Kingdom. The law, which has 14 articles, was announced by the government through a royal decree.
"Not only Saudi Arabia but other countries have also passed such laws in order to protect the rights of their citizens," the official said.
Tasattur enables a foreigner to invest in businesses that remain outside the purview of the Foreign Investment Law and helps them get away without paying taxes to the government.
Under this illegal practice, a Saudi allows a foreign worker to use his/her name and commercial registration and money to engage in various businesses without paying any fees or taxes, Al-Anazi explained.
He estimated the total value of money transferred by expatriates involved in tasattur at more than SR140 billion annually. "This is a huge loss for the national economy," he pointed out.
He said the transfer of such a large amount of money would affect the Kingdom's liquidity causing major economic damages. Such ventures also threaten the businesses of Saudis.
The ministry has been carrying out campaigns against tasattur in association with the ministries of interior, municipal and rural affairs, and labor.
"About 30 percent of fines imposed on people involved in tasattur are spent on individuals who inform us about such practices," he said. The total value of fines imposed last year reached SR8 million.
The majority of tasattur business takes place in the contracting sector (43 percent), followed by sales of consumer goods (19.2 percent), general trade (16 percent), foodstuff (8 percent) and other areas (15.8 percent).
© Arab News 2012
