By Michael Jabri-Pickett
Comment: Parliament’s only female member wants to tax expats more than locals - and she is not afraid to say why
One woman in Kuwait is willing to stand up for what she believes, no matter the cost.
From 50 elected representatives, Safa Al Hashem is the only woman in her country’s parliament, which is the most powerful institution of its kind in the GCC. In Kuwait, parliament can veto state decisions and make laws. In the UAE, by comparison, the Federal National Council (FNC), which is not a parliament but a consultative body, does not make laws, just recommendations.
The 52-year-old politician is talking about a dirty (yet well-known) secret in the GCC: nationality matters. It matters a lot. The issue bubbles under the surface of so much that happens throughout the region. Nationality affects us, and, unfortunately, it infects us.
Hashem is proposing that non-Kuwaitis be taxed differently to locals. This is an incredibly interesting premise in a country where only 30 percent of the population are citizens (2.9 million expats versus 1.3 million locals, in 2016).
“They’re sucking up the state’s resources,” Bloomberg quoted the Harvard Business School graduate as saying this month.
“Before asking citizens to pay, the government should reform the population mix by levying taxes on foreigners,” says the woman who was first elected in 2012, and most recently re-elected in November.
The GCC is not a melting pot. At the UN, there are representatives from 193 member states (plus Vatican City and Palestine). This number is often used by officials in the GCC to highlight the diversity and character of many of its cities.
Alaeddine Ghazouani, associate director at YouGov, an internet-based market research firm, was quoted by local media in April 2015 as saying 200 nationalities successfully co-exist in the UAE. That’s just it, they co-exist. They do not mingle. People stay within their own communities.
A Kuwaiti, who lives in Abu Dhabi and went to college in California, says Al Hashem is “a great role model for women around the world”.
“Being the sole woman in a parliament of 49 men is worth something.”
He says Al Hashem seems passionate about what she does and that she is definitely one of the few members who is looking to achieve change, “which is a lot more than can be said about many of the guys”.
But she is not doing it in such a way that makes all Kuwaitis proud, he says.
“I’m embarrassed to see some of these populist suggestions,” says the 29-year-old, who has worked in the UAE for three years.
“We’re looking to fix our country by imposing laws that have nothing to do with the core of the problem. Blaming it on foreigners, without whom our country would cease to function, is low hanging fruit that is shying away from addressing who is responsible for our country’s embarrassing pace of progress: Kuwaiti nationals.”
Kuwaitis are unique even amongst GCC nationals. Four years ago, Kuwait’s parliament approved a law writing off citizens’ debts on interest accrued on loans. (A similar debt-bailout bill was proposed in 2010, but failed to pass).
After the 1991 Gulf war, Kuwait wrote off almost all consumer debt (at the time believed to be $2.6bn). It wrote off millions more in a plan to settle $20bn in bad loans stemming from a 1982 stock market crash. In 2011, the Emir granted 1,000 dinars ($3,280) to each Kuwaiti and free food rations for 13 months.
These were debts paid off by the government for Kuwaitis, not for expats. The locals found themselves in trouble and their government bailed them out.
Still, Al Hashem says she refuses to remain silent. “Citizens would be willing to pay their fair share, but not when they know their money will go to pay for the others,” she was quoted as saying.
Times are changing in Kuwait. Petrol prices increased more than 80 percent last year, and the value-added tax (VAT) is coming in January, but it is time Kuwaitis recognise what are problems of their own doing and what are issues best left unsaid.
Is the real question, Will VAT be implemented in Kuwait on par with the rest of the Gulf in January or will they linger in confusion on the process way beyond the start date? Maybe this will be when the alarm bells go off and a correction in tone towards their expat community occurs in order to attract the correct foreign expertise to move this country forward? Kuwait struggles with a lack of foreign expertise and inability to attract the correct foreign expertise. Kuwait needs to take a good long look in the mirror, because it is not the fault of their burgeoning low-level labour community on why healthcare is overwhelmed or why their streets are gridlocks, it is the broad decisions of these MPs that fail to implement the correct systems which set boundaries and corrects Kuwait's problems where the country benefits as a whole. Taxation will be rejected by Kuwaitis and impossible for their low-level expat community, so other revenue sources are needed to fund the State.