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No decision taken on remittance tax for expatriates
March 31, 2018, 2:53 pm

Rapporteur of Financial and Economic Affairs Committee in the Parliament MP Saleh Ashour has affirmed the constitutionality of the proposal to impose tax or fees on expatriates’ remittances, similar to what banks and exchange companies do when transferring funds abroad without affecting the exchange rate

Ashour pointed out that Article 48 of the Constitution stipulates the right of the State to impose taxes on everyone, whether citizens or expatriates, taking into account their income and ensuring they lead a decent life. According to the article, payment of taxes and public imposts is a duty as per the law which regulates exemption of those with very low income in such a way that the minimum standard of living is maintained.

He reiterated the Constitution grants the State full right to impose taxes or fees on expatriates in accordance with the law; while taking into account those with very low income, the possibility of exempting some people from paying the tax and imposing fees on remittances.

Meanwhile, Researcher Mohammad Ramadan said the tax will bring about more harm than benefits. He highlighted the experience of the United Arab Emirates in creating investment opportunities for expatriates to invest their money, stressing that such a step will be more profitable for the state instead of imposing taxes.

Ramadan indicated that imposing such a tax will leave expatriates with no choice but to search for other ways to send their money, even through illegal methods. He added that allowing expatriates to own real estate in Kuwait is a good way of taking advantage of their money.

Meanwhile, experts stressed Kuwait has about three million expatriates but they remit about $15 billion per year. According to IMF, the maximum revenues expected from imposing this tax are about 0.3 percent of the total national revenues of Kuwait, which is $4 billion. This amount is very less compared to the amount required to bring about the required economic reform.

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