Remittance tax is a fee for expats using govt services

The parliamentary financial affairs committee said that the aim of taxing expats’ remittances is to find new sources of income and it must be considered as a fee for the educational, health and other services the state provides them.

The committee also believes that expats have access to subsidized goods such as fuel, gas and electricity, and that this tax will eventually affect the quality of the services as a whole.

The parliamentary legislative committee unanimously rejected all points raised againts the tax proposal. Earlier, the Central Bank had raised objections for this proposal and said the proposals have some technical and financial loopholes that should be reconsidered and dealt with. The Central Bank pointed out that the total figure of KD 4.14 billion reported as expats’ remittances is misleading, as many expats have been making remittances on behalf of citizens for trade and commercial reasons. The bank explained these remittances include sums sent to non-labor exporting countries such as the EU, the US and the UAE.

Furthermore, the Central Bank noted that taxing expats’ personal remittances will affect domestic helpers and lead to demands of pay hikes. It also warned that taxing commercial remittances will lead to an increase in prices, which will negatively affect citizens. The bank also warned that such taxes will force expats to make illegal remittances and create a black market that will affect the money exchange market and weaken the Central Bank’s financial control.