Financial expert warns against imposing taxes on expats in Kuwait


A financial expert in Kuwait has warned against imposing taxes on remittances for expatriates, saying they would have negative repercussions on the economy.

Several lawmakers have argued for imposing taxes on remittances by expatriates, saying that that could generate a new source of revenue for the state as it is dealing with the financial consequences of the downfall in the price of oil.

Under one proposal, expatriates would pay two per cent on any remittance of less than KD100 and up to four per cent on remittances between KD100 and KD499, and to five per cent on remittances that exceed KD500.

The proposed taxes would not bring in significant revenue to the state and would also have a chilling effect on investment from abroad which could help add diversification of the sources of income.

“Instead, we should focus on creating jobs for Kuwaitis that generate revenue,” said Talal Bahman, the vice-president of the Exchange Association, adding that the country needed to boost its domestic production and reduce imports. 

Alternatively, the proposals clash with country’s moral values and the concept of Kuwait as the “Land of Humanity”.

Instead of punishing expats, “Kuwait should be fostering an attractive environment for them which would encourage them to invest or save their money here”, he said.

“This means providing real investment opportunities which could raise levels of liquidity in the market which will stir up the Kuwaiti economy as a whole”.

By taxing remittances, expatriates could also turn to alternative ways to send money home including accessing the black market and money laundering, Bahman warned.

Finally, the proposals would only encourage skilled professionals to leave the country and seek employment elsewhere, he said.

“Lawmakers should be cautious when they propose economic legislation without thoroughly studying their impact and results on the country as a whole,” Bahman warned.

Around 70 per cent of Kuwait’s total population of 4.3 million people are foreigners. 

Several lawmakers have been pushing for ways to confront the demographic imbalance, including imposing taxes on expatriates.

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