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Wed 3 Jun 2015 01:47 PM

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UAE said to mull remittance tax on expats

Federal National Council member moots tax on the income that expats send home each year

UAE said to mull remittance tax on expats

A member of the UAE’s Federal National Council on Tuesday called for foreign workers to be taxed on the billions of dirhams they send back to their home countries each year.

Umm Al Quwain member Ali Jasem reportedly told council on Tuesday: “The Federal National Council and the Ministry of Finance should produce a package of creative measures to bolster the country’s revenues, including a tax on remittance of the billions of dirhams which foreign workers send back to their home countries every year.”

A fee collection system would have to be developed to ensure such a levy is properly implemented and collected, Jasem added.

He made the comments as the council was debating audit reports from 2012 and 2013, according to a report in Gulf News.

Obaid Humaid Al Tayer, the minister of state for financial affairs, later declined to comment on whether authorities would proceed with the tax. The

“Government may not comment on issues of such significance before they are throughly studied in terms of their socioeconomic impacts,” he was quoted as saying.

Introducing a remittance tax on expats working in the UAE would have a significant impact, potentially raising costs in the economy and reducing the supply of foreign labour, the newspaper reported.

However, it added that the proposal nonetheless reflects growing concern in the UAE over declining oil revenues and the need to retain as much of the wealth generated within the country as possible.

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abdul hafeez sheikh 4 years ago

UAE is now one of the most developed countries in the world the country is not the same as 30 40 years back any person who goes there enjoys the best facilities and he has to pay for that so going there to earn the money is good but now you have to py your taxes as you enjoy the best facilities

cliff 4 years ago

somehow I don't think the labourers and domestic servants who can ill afford to have any of their meagre savings taxed enjoy the "best facilities". Unless they are working 14 hours a day in them. Tax luxury goods instead.

Peter Peter 4 years ago

I agree totally with Cliff. If at all , UAE should tax "consumption" and not "savings".

The vast bulk of remittances are from poor workers who send money to support their families. I know some who even forego meals towards the end of the month as they have no money left as they send as much as possible to their families back home. To tax them would be really cruel.

If a tax regime has to be set up why not on the rich multinational corporations who are minting millions and not paying any taxes ?

FAhmed 4 years ago

Taxation should be levied for a certain bracket/value of remittance per year. This should be very easy to track and enforce. As long as it is not at the expense of those earning less than 3000 a month. But it should also confer certain benefits such as removal of the indirect taxes on individuals & businesses.

turk971 4 years ago

Same issue was raised in Oman and rejected by their Economic Committee the same being in contrast with trade practices and possible effect on investments. Hopefully, the same light will be seen in Dubai. The best compromise can be VAT on luxurious goods as also supported by most of the readers here.

Andre 4 years ago

Taxation must apply on the transfers of those earning salary 5000 Dhs and above, the higher the remittance the higher the taxation.

love quotes 4 years ago

If a tax regime has to be set up why not on the rich multinational corporations who are minting millions and not paying any taxes ?

one of the joes 4 years ago

We already do pay - instead of taxes, it is called pay for use.

Setting up business here as an SME is more expensive than in most European countries. And running as a business is not cheap neither. You pay for licenses and visa and you are forced to rent office space that you may not need.
So you already pay for the infrastructure.

Have you ever looked at licenses that are on annual renewal and include funny line items like housing and cleaning - no matter if you pay housing directly to your staff and employ professional cleaners? This money goes into government accounts.

And even as a tourist you pay. Government imposed fees are included in hotel and restaurants bills.

And no, Dubai is not one of the most developed countries, it only has pretty new physical infrastructure that still looks shiny in may parts of town - and that infrastructure will support the process to become a developed country in the future.

Ivonne 2 years ago

I would rather pay a percentage tax to the UAE government, where I live and work, than to my home country where I receive no benefits at all. The dual taxation agreement will then prevent home countries to claim tax from us working in the UAE.