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Mon 2 May 2016 12:50 PM

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Renewed call for Kuwait impose 5% tax on expat remittances

Kuwaiti MP Faysal Al Kandari said the new tax could bring in up to $66.5 million annually

Renewed call for Kuwait impose 5% tax on expat remittances
Kuwaiti MP Faisal Al Kandari. (YASSER AL-ZAYYAT/AFP/Getty Images)

A Kuwait MP has proposed to introduce a 5 percent tax on expat remittances, which he said will provide increased revenue for the state.

As Kuwait deals with financial difficulties from the downfall in oil price, Kuwaiti MP Faysal Al Kandari says tax money, collected through fiscal stamps to be issued by the finance ministry, would make a new source of revenue for the country of up to $66.5 million annually.

Under the proposal, expatriates will pay 2% on money transfers less than $332, 4% on transfers between $332 and $1,660, and 5% exceeding the $1,600, according to Al Rai Daily.

Money orders and cheques must be sent by the accredited banks and money exchanges to the finance ministry for control. Those who send money without paying the tax fee will be sentenced to jail for up to six months or fined up to $33,250, according to the proposal.

Al Kandari based his calculations of addition source of revenue on the premise that the minimum annual remittance figures in Kuwait were $6.6 billion.

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

MP Kamel Al Awadhi submitted a similar proposal in June 2015, and said the collected fee would contribute towards the “highly subsidised” services foreigners receive.

He claimed expats had sent home about $69.5 billion during the past five years from 2010, meaning with the 5% tax would provide the state with $665 million of additional revenue each year.

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

Louai Alasfahani 3 years ago

Taxes worldwide are mainly paid by the citizens of the country since they are the ultimate beneficiary of the perks and benefits of citizenship such as social security, free medical care, subsidised goods, 0% loans, free housing, free schooling, etc. as in the case of Kuwait.Does the suggestion by Al Kandari offer any benefit to the expat in exchange for his suggested tax? i.e. if a non citizen pays taxes will they become citizens in due time? or at least get social security? or permanent residence? or anything at all?

Sushil 3 years ago

"Taxes worldwide are mainly paid by the citizens of the country" - not true. Work in US; a simple fact of being resident in the country is good enough to pay taxes on the income generated in the country.

Martin 3 years ago

I paid tax in every single country I worked in, without being a citizen in any.