Expatriates in Kuwait should pay up to 5% remittance tax, says MP

This post was originally published on 2 May 2016 and the content may be outdated.

Expatriates should pay a tax of up to five per cent on remittances from Kuwait, a lawmaker has said.

MP Faysal Al Kandari said that the tax would make a new source of revenue for the state as it is dealing with the financial consequences of the downfall in the price of oil, Gulf News has reported citing Kuwaiti daily Al Rai.

Under the proposal, expatriates will pay two per cent on any remittance of less than KD100.

However, the tax goes up to four per cent on remittances between KD100 and KD499, and to five per cent on remittances that exceed KD500.

Mode of collection

All money orders and cheques must be sent by the accredited banks and money exchanges to the finance ministry for scrutiny and control.

The tax money could be collected through fiscal stamps to be issued by the finance ministry, he said.

Punishment for violators

Those who break the law in any way, including sending money in a non-regular way, will be sent to jail for up to six months or made to pay a fine of up to KD10,000, Al Kandari said in his proposal.
The lawmaker said the new tax would provide the state with an additional source of revenue of at least KD20 million annually, considering that the minimum annual remittance figures in Kuwait were KD2 billion.

Fair and just way to improve services

Al Kandari said that “imposing the remittance tax in a fair and just way would help the state improve the standards of services.”

In June last year, MP Kamel Al Awadhi submitted a similar proposal and argued that the fees to be collected would contribute towards the highly subsidised services foreigners receive from the state.

However, the proposal was rejected by the parliament’s legislative committee.

Around two thirds of the 3.3 million people living in Kuwait are foreigners, mainly non-skilled workers in the construction and service sectors.

Indians make up the largest community whereas Egyptians constitute the largest Arab community in the northern Arabian Gulf state.

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4 thoughts on “Expatriates in Kuwait should pay up to 5% remittance tax, says MP”

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  1. Would like to stress more on the point which says that the ‘standards & services’ shall be improved for expatriates. Well, of the 6 GCC nations, expatriates in Kuwait are hit hard when it comes to rights, services or facilities. As the Govt. are well aware that the majority of work-force is non-skilled in const. & service sector, how can they charge these minnow who face extreme hardships while working in a nation who seldom recognize them as civilians who have been striving hard to convert a tiny gulf oasis into a bustling city and a modern nation as a whole. Its the thick sweat that has been flowing non-stop over the decades especially from the Indian-subcontinent region that justifies the growth & development Kuwait or any Gulf nation has observed.
    To the least the Govt. can do is appreciate the efforts on a whole rather than introducing taxes or any other means that can strain the poor workforce who are already struggling a lot! The GCC can’t be compared to the Western nations who have been imposing taxes however, provide ample of benefits/services to its residents and opportunity to become a citizen as well. This negative change may not impact the highly skilled and White collar expatriates as they would look for migrating to better options namely, Europe Pacific or Americas. My concern here are for the blue collar workers.
    All the best Kuwait, I am sure this isn’t gonna workout in the long run and the implementation may just backfire…..

  2. Would like to stress more on the point which says that the ‘standards & services’ shall be improved for expatriates. Well, of the 6 GCC nations, expatriates in Kuwait are hit hard when it comes to rights, services or facilities. As the Govt. are well aware that the majority of work-force is non-skilled in const. & service sector, how can they charge these minnow who face extreme hardships while working in a nation who seldom recognize them as civilians who have been striving hard to convert a tiny gulf oasis into a bustling city and a modern nation as a whole. Its the thick sweat that has been flowing non-stop over the decades especially from the Indian-subcontinent region that justifies the growth & development Kuwait or any Gulf nation has observed.
    To the least the Govt. can do is appreciate the efforts on a whole rather than introducing taxes or any other means that can strain the poor workforce who are already struggling a lot! The GCC can’t be compared to the Western nations who have been imposing taxes however, provide ample of benefits/services to its residents and opportunity to become a citizen as well. This negative change may not impact the highly skilled and White collar expatriates as they would look for migrating to better options namely, Europe Pacific or Americas. My concern here are for the blue collar workers.
    All the best Kuwait, I am sure this isn’t gonna workout in the long run and the implementation may just backfire…..

  3. Bhavesh Kikla

    Well it’s time GCC countries start thinking of implementing direct tax, instead of so many indirect taxes, charging service tax is good as income tax, GCC countries have been considered a tax haven for expatriates work force, but implementation of such tax would make a negative impact of foreign work force, as gulf will become less appealing, and they will opt out for US, UK, Canada, Australia, as paying taxes will also give them rights

  4. Bhavesh Kikla

    Well it’s time GCC countries start thinking of implementing direct tax, instead of so many indirect taxes, charging service tax is good as income tax, GCC countries have been considered a tax haven for expatriates work force, but implementation of such tax would make a negative impact of foreign work force, as gulf will become less appealing, and they will opt out for US, UK, Canada, Australia, as paying taxes will also give them rights

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