Minister Hind Al-Subaih
Minister Hind Al-Subaih

KUWAIT: Minister of Social Affairs and Labor and State Minister for Planning and Development Hind Al-Subaih yesterday signed a new decree sharply raising charges on work permits and transfer of residence. The decision raises the charge for a work permit for the first time from KD 2 to KD 50 and its renewal from KD 2 to KD 10. It also raises fees for transfer of work permit (residence or changing employer) from KD 10 to KD 50. The decision becomes effective from June 1.

According to the law, such charges are paid by the employers, but in practice, the majority of employers force their workers to pay these fees because of the lack of an effective monitoring system and penalties. The Public Authority for Civil Information increased charges for civil IDs from KD 2 to KD 5 from the beginning of April. Several other charges are expected to be raised soon.

Meanwhile, the National Assembly’s financial and economic affairs committee yesterday amended a draft bill for raising power charges to exclude all Kuwaitis in both private homes and apartments from the increase. The committee also exempted the agricultural and industrial sectors from the increase, according to rapporteur MP Mohammad Al-Jabri. The new amendments mean that only expatriates, the commercial sector and government offices will be subjected to the raise.

Last week, the Assembly passed in principle the bill after exempting private homes of Kuwaiti citizens from any increase and kept the price at 2 fils per kilowatt regardless of consumption. The bill however did not exempt tens of thousands of Kuwaiti families living in apartments, so the committee made the amendment.

The increase for expatriates remained unchanged at 5 fils per kilowatt for the first 1,000 kilowatts, 10 fils per kilowatt for between 1,000 and 2,000 kW and 15 fils per kilowatt for any consumption above 2,000 kW. The Assembly will vote on the new amendments next week and is expected to agree on the dates of applying the new charges. Initially, it was proposed to start for expatriates after 15 months from the issuance of the law.

The new charges for expatriates will hardly change during winter months but are expected to increase manifold during the summer months because of air-conditioning. For example, an average consumer who paid only KD 5 monthly on average could end up paying over KD 50 for each of the summer months.

The government also plans to reduce subsidies for petrol to increase its prices by over 50 percent and is waiting to strike a deal with MPs on how to deal with Kuwaiti motorists. Some MPs have proposed to exempt citizens from any increase in petrol prices while others called for paying them cash assistance as compensation for the raise. Such decisions are expected to eventually cause a rise in the cost of a number of services and goods, thus raising inflation rates considerably.

Commerce and Industry Minister Youssef Al-Ali said last week in the Assembly that the ministry does not expect raising power charges to result in increasing prices of other services and goods. The ministry had already issued a decision banning any artificial increase in prices of consumer goods without a permit from the ministry following the increase in power and petrol charges.

By B Izzak