Legal panel says tax on expat remittances unconstitutional

KUWAIT: The National Assembly’s legal and legislative yesterday rejected a proposal calling to impose taxes on financial transfers by expatriates to their home countries, saying such taxes are “unconstitutional”. The proposal was made by a number of lawmakers, mainly MP Safa Al-Hashem, who had proposed to impose a five-percent tax on remittances made by expatriates to help boost non-oil revenues to finance the budget.

The Kuwait Central Bank had also rejected the idea, saying it is not in line with Kuwaiti laws and warned of its negative impacts on the national economy. The 3.1 million expatriates living and working in Kuwait send around $18 billion to their families in their home countries every year. Hashem, who has been mounting an anti-expat campaign, said that by imposing the tax, expatriates will be discouraged to send huge sums of money to their home countries, thus helping the national economy.

Like all Gulf Cooperation Council (GCC) states, Kuwait adopts a very liberal economic policy, especially on money transfers abroad, which is important to win the confidence of foreign investors and help the inflow of foreign investments into the country. The decision of the committee will be reviewed by the financial and economic affairs committee, of which Hashem is the rapporteur. Even if the financial panel approves the proposal, the final decision will be made by the full house.

In other decisions, the legal panel approved a draft law calling to grant stateless people or bedoons full civil and social rights. It also approved a proposal for the management of crises and catastrophes and approved another draft law calling to stop the implementation of jail sentences before they were approved by the court of cassation, the highest court in the country.

By B Izzak

This article was published on 29/01/2018