KuwaitPolitics

Panel in favor of taxing expat money transfers

Salah Khorshid

KUWAIT: The National Assembly’s financial and economic affairs committee yesterday appeared headed to approve proposals to impose taxes on money transfers by expatriates despite financial and constitutional objections. Head of the committee MP Salah Khorshid said the panel decided to postpone the voting on the issue until a future meeting, after members agree on one of the four proposals that have reached the panel.

Khorshid rejected claims that imposing taxes on expatriates’ remittances would tarnish Kuwait’s image abroad and may involve constitutional suspicions, as it discriminates between citizens and foreigners. Justifying a possible decision to tax expats, Khorshid said some Gulf states impose similar taxes on expatriates’ transfers, without naming any state. In fact, none of the five Gulf Cooperation Council (GCC) member states – Bahrain, Oman, Qatar, Saudi Arabia and United Arab Emirates – impose such taxes.

Khorshid said if the taxes are approved, the state coffers will be boosted by some KD 50 to 60 million. The Central Bank has strongly opposed plans to tax expatriate money transfers, saying it will be counterproductive and will boost black market dealings. The Assembly’s legal and legislative committee opposed the move on the grounds that it discriminates between citizens and expatriates.

Khorshid said the proposals do not call for imposing any such taxes on Kuwaiti citizens. One of the proposals, which calls to impose a five-percent tax on any transfer by expatriates, was submitted by MP Safa Al-Hashem. Khorshid said that based on figures by the Central Bank, expatriates remitted KD 4 billion last year and as much as KD 19 billion during the past four years, an indication that transfers have been on the decline.

Since the crash of oil prices in mid-2014, Kuwait has imposed several fees on expatriates and spared nationals. These included hiking electricity and water charges and sharply raising medical fees. It has also raised fuel prices for both citizens and expats, but is considering compensating nationals.

Meanwhile, head of the Assembly’s budget committee MP Adnan Abdulsamad said yesterday that the government has proposed to increase spending in the new budget to KD 21.5 billion, an increase of over KD 2 billion. He said that the request was submitted without any details and relates to around 20 state bodies, adding that the approval of the budget is likely to be delayed.

Separately, an official at the Anti-Corruption Authority said yesterday that it has received around 100 cases since its launch in late 2016. Mohmmad Buzubr said 11 cases have been referred to the public prosecution and some of them are already being handled by the courts. He said that at least one case was filed against a minister and is being handled by the special tribunal for trying ministers.

By B Izzak

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