Kuwaiti Lawmakers In Favour Of Taxing Expat Remittances

Kuwait’s financial and economic affairs panel linked to the National Assembly is reported as being in favour of a new law taxing expat remittances to foreign bank accounts.

Committee chairman MP Salah Khorshid told the media a vote on the issue is being delayed until a future meeting following an agreement by vote on one of four proposals related to the issue. Khorshid has rejected claims that such a tax would damage the emirate’s international image as well as involving constitutional questions as it discriminates against foreigners working in Kuwait.

Justifying the possible decision to introduce the tax, Khorshid said several Gulf states already impose it. In reality, not one of the five GCC member states imposes the controversial tax. According to the chairman, should the tax be imposed, the Kuwaiti economy would benefit by up to KD 50 to 60 million, although the emirate’s Central Bank is opposing the plan in its entirety. The bank’s position is that the tax would firstly be counterproductive and, secondly, would spark a huge boost in black market dealings. The National Assembly’s legislative and legal committee has already opposed the plan as it discriminates between expatriates and Kuwaiti citizens.

Unsurprisingly, one proposal that a five per cent tax on all expat remittances be imposed was submitted by MP Safa al Hashem, infamous for her constant attacks on Kuwait’s expat worker community. However, Khorshid pointed out that, based on Central Bank data, transfers of money outside the emirate by expat workers have been declining over the past four years. Following the oil price crash almost four years ago, imposing various fees on the expat population whilst sparing locals has been seen as the way out of the declining revenue crisis, but has caused many long-stay expats who’ve contributed to Kuwait’s development to feel they’re being unfairly targeted.