Expats sending money home to be hit by Kuwaiti tax on remittances

Published:  8 Nov at 6 PM
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Newly promoted expats’ enemy Safa al Hashem hits out again at expat remittances.

Al Hashem, now the head of Kuwait’s National Assembly Financial and Economic Affairs committee, hit out yet again at expats living and working in the emirate by calling for government support on a draft bill imposing taxes on money sent back to the home country by expatriates. Lawmakers are expected to push the bill though its approval stage, giving more chance for it to be voted into Kuwaiti law. T

he controversial bill was first introduced by al Hashem last year, at which time the Kuwaiti government, the parliament’s legislative and legal departments and even the Central Bank rejected it, saying it would negatively effect Kuwait’s economy as well as spurring the creation of a black market for money transfers. Later, the committee of which al Hashem is now head approved the bill and sent it to the Kuwaiti parliament for debate.

The present bill calls for percentages up to five per cent to be placed on expatriate remittances, in addition to the normal charges and commissions taken by exchange houses and banks. One reason why so many remittances are sent outside the country is that non-Kuwaiti nationals are disallowed from starting small businesses and buying property in the emirate, leaving them no option but to send money back home.

Charges will range between one per cent on remittances of up to $330, two per cent on transfers between $334 and $997, three per cent on transfers of between $1001 and $1664 and a full five per cent on remittances of $1678 and upwards. The bill is the latest in a series of legal attempts targeting Kuwait’s expat population, the which accounts for some 70 per cent of the emirate’s 4.6 million nationals.

Although the bill seems mainly to be aimed at low-skilled workers sending cash back to their families, it could also hit expat professionals planning buy-to let investments, paying off mortgages in the home country, supporting overseas family members or paying tax bills.
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