June 16, 2015      15:12

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MP proposes 5% tax on expat money transfers





Kuwait: Pro-government MP Kamel Al-Awadhi yesterday proposed that expatriates should be forced to pay a five percent tax on any money transfers sent to their home countries to pay for highly-subsidized public services offered to them. The lawmaker, who headed the immigration department for years before turning to politics, presented his proposal in the form of an amendment to the central bank law.

The state should have the right to “a share in the money transfers by expatriates obtained against services offered by the state to them including education, health in addition to highly-subsidized services and commodities like petrol, gas, electricity and water,” Awadhi said in his proposal.

The majority of expat students study in private schools at their own expense as they are not allowed by law to attend public schools. Expatriates also already pay KD 50 per person per year as a health insurance as a requirement for renewal of residence.

Awadhi’s proposal stipulates that all banks and money exchange companies must deduct five percent of money transfers by expatriates in favor of state coffers. Agreements governing investments and free movement of capital are exempted from the proposal.

Those who fail to pay the tax will be fined double the amount, according to the proposal. He said that based on the latest statistics, expatriates have sent home around KD 21 billion during the past five years, or around KD 4.2 billion in yearly average. However he did not cite the source of his statistics.

He said if his proposal is applied, the state can be assured of over KD 200 million of extra revenue every year. Kuwait has so far exempted foreigners working here from any form of taxation but has in recent years started imposing or increasing certain fees on them, especially in the fields of health and education.

It has also begun implementing an institutional separation - like opening hospital or government department services for locals in the morning and allowing expatriates only evening hours. At the same time, expatriates are forced to pay extremely high rents and expensive school fees and get no compensation for that. In a related development, a senior trade union official yesterday blasted local contractors for the mistreatment of expat workers like forcing them to work under the sun during 50+ temperatures or failure to pay them salaries on time.

Commenting on the collapse of a mosque under renovation where four expats were wounded on Sunday, head of the government workers’ trade union Bader Al- Azemi blamed negligence and failure to use trained workers in a bid to save money by contractors. He said these contractors ignore safety measures and force their workers to work extra hours without additional pay. He said that some employers delay payment of salaries for more than three months and instead keep the money in the bank to earn more interest.

Azemi said that all these abuses take place while the government remains silent. He said that there is a law that regulates the affairs of workers, but it is not implemented on influential employers. In another development, opposition to the so-called electronic crimes law is growing.

A number of MPs have vowed that they will oppose the legislation in its current form because it suppresses freedom of speech. The law was given the initial nod by the national assembly two weeks ago and stipulates jail terms of up to 10 years and between KD 20,000 and KD 50,000 for some cyberspace crimes.

The liberal National Democratic Alliance called on MPs to reject the law if it remains in its current form and called for scrapping a number of articles which it said involve severe penalties. Also, MPs Adnan Abdulsamad, Rakan Al-Nasef and Saleh Ashour have clearly said they will oppose the legislation if no key amendments were made. The law is expected to come up for the second and final round of voting today.

Source: Kuwait Times



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