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Parliament set to debate expat remittance tax bill

GDN Online Desk

Kuwait’s parliament will debate a controversial draft law which aims to tax remittances of expatriates in the country on April 17.

If the draft is approved, it will be referred to the government and in case the cabinet accepts it, it becomes law.

Kuwait would then become the first country in the GCC to impose such taxes.

The government has already expressed its opposition to such a move.

On Wednesday it listed several reasons to support its stance.

Ministerial sources told Kuwaiti daily Al Anba that the government was worried that the bill, if passed, would constitute a risk to Kuwait’s international reputation and weaken its ability to combat money laundering.

The government believes that imposing taxes would also harm financial stability in the country, the source said.

A tax on remittances would generate a black market in the financial market that would be difficult to control. The government would also face problems trying to control remittances outside the banking system, the source added.

“Another reason of concern for the government is the direct impact of such taxes on the processes of attracting foreign investment,” the source said.

“The government has also cited the absence of a clear mechanism for the application of the remittance tax and of a system within the banks for the deduction during money transfers.”

The financial committee in the parliament on Sunday voted four to one in favour of a bill that calls for introducing the tax and make expatriates pay fees for sending money home.

The support clashed with an earlier decision by the parliamentary legislative committee to dismiss the bill on the grounds that it was not constitutional.

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