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Kuwaitis and Expats decry bid to impose tax on remittances
March 27, 2018, 8:30 am
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Several citizens and expatriates have expressed disappointment over parliamentary attempts to impose tax on expatriates’ remittances, asserting most expatriates have very limited income.

In an investigative report, they pointed out that imposing tax on remittances of expatriates is against the Kuwaiti Constitution; urging the lawmakers to follow in the footsteps of the best countries, not the worst.

They explained that putting pressure on expatriates continuously will make citizens bear the repercussions first before the targets. Bu-Jassem, a citizen, echoed this in the interview. He warned that once such tax is imposed; the citizens will suffer the brunt, particularly in terms of services offered by expatriates like the mechanics, those repairing refrigerators, air conditioning units, and plumbers.

Adel Saleh pointed out that expatriates are already suffering due to the increase in fees for health services, especially those with low income who have chronic diseases.

Due to financial difficulties, they usually decide to avoid going to the hospital in order not to pay hefty fees at the expense of their health, he lamented.

He stressed that tax imposed on remittances will be the last straw which will break the camel’s back and it will prompt a large number of expatriate families to leave this country.

Musa Ghanim, an expatriate, suggested that if imposing tax is necessary; it should be applied only on those who remit more than KD1,000 a month, not an ordinary employee or laborer in the construction field who receives KD6 per day.  He added that imposing tax on remittances will hurt the low-income laborers who are trying to make ends meet.

Meanwhile, legal advisor at Kuwait Human Rights Society Abdul-Rahman Al-Ghanim indicated that Kuwait is a signatory to international conventions against all forms of discrimination.

He wondered how the Parliament could think of imposing taxes on expatriates alone, excluding the citizens. He argued that imposing tax on expatriates’ remittances contravenes the human rights convention in one way or another.

Another expert in legal affairs, Dr. Muhammad Al-Ahmad, stressed that the Kuwaiti Constitution does not permit discrimination between humans living on this land.

He cited Article 29 of the Constitution which stipulates: “All people are equal in human dignity and in public rights and duties before the law, without distinction to race, origin, language, or religion.”

He also cited Article 24 of the Constitution which states that “social justice shall be the basis of taxes and public imposts.” He affirmed that any legislation which violates the Constitution will never see the light, warning against putting more pressure on the foreign labor force.

Financial analyst and economic expert Ameer Al-Mansour argued that imposing tax on the remittances of expatriates will prompt them to look for other means of sending money to their countries, such as through investment companies.

If this happens, the forex business will become active and this will affect the money exchange market in the country, he explained. He stressed the Kuwaiti Constitution will continue to impede such proposals because it does not allow imposing tax on one person while exempting another, adding that Kuwait should stop following such path.

He recommended imposing tax on income, not remittances, as the latter is not permissible due to differences in income — someone earns KD200 and another earns more than KD1,000.

He added the ideal path is to conduct a comprehensive study on this issue such that tax is imposed on the income of expatriates. Reacting to statements about imposing tax on the remittances of expatriates in the United Arab Emirates (UAE) and Saudi Arabia, he asked: “Why compare Kuwait with the worst, not the best?”

In a related development, a report released by the National Assembly revealed that India topped the list of countries which receive the highest remittance from expatriates in Kuwait.

The report said the remittance sent to India reached KD1.1 billion – 26.6 percent of the total foreign remittance, followed by Egypt with KD750 million (18.1 percent), Bangladesh came third with KD290 million (seven percent), Philippines is fourth with KD250 million (6.1 percent) and Pakistan is fifth with KD220 million (5.3 percent).

Other countries were Jordan with KD130 million (3.1 percent), Iran with KD110 million (2.7 percent), Lebanon with KD80 million (1.9 percent) and Nepal with KD70 million (1.7 percent).

The foreign remittance in 2017 totaled KD4.14 billion and KD3.13 billion (75.6 percent) of which were money sent by expatriates in Kuwait. Kuwait is ranked seventh among the top 10 countries from which foreign money transfers are done.

The United States of America came on top, followed by the Kingdom of Saudi Arabia, Russia, Switzerland, Germany, United Arab Emirates, while France ranked eighth followed by Luxemburg and Britain.

Source: Arab Times

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