Lawmakers in Kuwait have endorsed a controversial draft law that stipulates prison and fines for expatriates who use back channels to send money abroad.
Members of the parliamentary financial committee voted four to one to refer the remittance tax bill to the 65-member parliament for debate on 17 April. If the draft is approved, it will be sent to the government for final approval before being written into law.
In the latest of several moves by Kuwaiti authorities against expatriate workers, the bill proposes levying a tax depending on the sum being transferred. It is estimated that workers in Kuwait transferred $63.2bn between 2012 and 2017. Amid concerns within government, the committee has recommended the proposed tax be levied only on foreigners.
For remittances up to KWD90, there would be a charge of 1%. This would rise to 2% for KWD100-200, 3% for KWD300-499 and 5% for sums totalling KWD500 and above. (1 KWD = $3.33.)
Salah Khorshid, the chairman of the financial committee, said: “Banks and money changers take fees on remittances, and the government should be the one to take them, especially that the figures that we see make us keener on the money and on the interests of the state.”
Khorshid told Gulf News that three fellow member states of the Gulf Cooperation Council (GCC) had laws permitting taxes on remittances.
The propose new rules will mean that expats who remit money through a non-accredited bank, they face a maximum five-year jail sentence and a fine of double the value of what was sent abroad.
Last year Kuwait introduced controversial new health fees for foreigners working or staying in the region.