Tax proposed on expat money transfers – Rate up to 5%
MP Faisal Mohamed Al-Kandari has proposed imposing tax on money transfers of expatriates. In a press statement, Al-Kandari pointed out the State of Kuwait hosts about three million expatriates who transfer money to their countries, which reached KD 19 billion in the last five years and this amount is equivalent to the national budget of Kuwait for one year.
He said that imposing tax on such transfers will generate new income for the government, which will ensure better services for the expatriates and citizens. He disclosed the income from this tax will not be less than KD 20 million per year, taking into consideration the minimum amount transferred to other countries is about KD 2 billion per year.
He believes this will be a source of alternative income for the government, stressing this tax should be applied fairly and the income should go to the treasury of the government to improve services.
Article One of the law stipulates the need to impose tax on money transferred outside Kuwait.
Article Two stipulates the tax percentage as follows: two percent of the amount if the transfer is less than KD 100, four percent if the amount ranges from KD 100 to KD 499, and five percent for transfers above KD 500.
Article Three stipulates that collection of the tax will be through financial stamps from the Ministry of Finance which will be sent to the accredited exchange companies and banks for control and audit.
Article Four states the penalties include six months imprisonment and fine of not more than KD 10,000 on those who do not apply the law or those who do not transfer money through legal process.
Article Five mandates the Prime Minister and all concerned authorities to implement the law from the date of its publication in the official gazette.
Meanwhile, the parliamentary Legislative and Legal Affairs Committee on Sunday unanimously approved a number of bills, including the proposal to amend the second paragraph of the second item of Article Five of Nationality Law No. 15/1959.
Source : Arabtimes
By Abubakar A. Ibrahim Arab Times Staff
Comments (5)
Filed in: All • Expats in Kuwait • Local News
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19 billion devided by 5 devided by 3 million=kd 1266 per year per expat. Now Kuwait has of course low rents,low food costs and expats are not charged any other fees, so i think the average expat must be able to save 40% of the salary and send that away. Average annual salary therefore must be kd 1266 devided by 0.40 = Kd 3167 (kd 264 monthly) This includes the maids, drivers,tea boys,street cleaners and the other 2 million low paid workers. I don't believe this myself!! Or could it be that most of the money disappears abroad because all consumer and other goods are imported from abroad?
5% of the amount paid to transfer the money that is 1KD.(as it is the price we pay for service delivered as per service tax laws in most of democratic countries)
and not on the amount of money transferred.
As it is my hard earned money, why should i pay a percentage of it to take it wherever i want?
Doesn't make any sense.
If this tax applies only to expats transfering money then i can imagine clever kuwaitis (who are exempt from the tax) doing the transfer for the expat charging less than the state tax for their services. Also the state should consider the empty your wallet scheme at the airport and again you travel with a kuwaiti who will carry your money for you against a smaller fee.Then of course there will be the expat petrol station with a lot more expensive coloured expat petrol (and can you imagine the penalties involved if you are caught with Kuwaiti only petrol in your tank!!)
you should also pass a bill that the minimum salary will start from 250. Should be obligatery to all companies and business with home maids, cleaner, any shop owner, mean every and each expat should be get not less then KD 250. You already have introduced an excellent system of enforcing the owners by paying to labors via labor accounts. So it will be easy to keep an eye on them. Remeber plz KD 250 the final minimum salary. Thanks
Well done Kuwait. It is the last but not the least nail into the expats body.