Kuwait moves to tax remittances, thousands of Indians could be hit

NEWDELHI: A Kuwaiti parliamentary panel has proposed a draft law to impose a tax on remittances by expatriate workers, a move, which if implemented, could affect thousands of Indians working in the country.

The financial and economic affairs committee of the Kuwaiti Parliament on Sunday approved the bill stipulating taxes on remittances by expatriates, the staterun Kuwait News Agency reported. According to the proposed law, a fee of 1% would be imposed on remittances by workers with salaries of up to 90 dinars ($300), 2% on remittances by workers with salaries of 100 dinars to 200 dinars ($333 to $ 667), 3% on remittances by workers with salaries of 300 dinars to 499 dinars ($1,000 to $1,665) and 5% on remittances by workers with salaries of 500 dinars to 1,664 dinars ($1,668 to $5,550).

The remittance tax will be in addition to commission charged by moneychangers and banks. Under the draft, any bank or moneychanger that does not comply with the proposed law will be fined up to 10,000 dinars, while anyone who does not remit money through accredited banks and moneychangers will be imprisoned for a maximum of five years and fined an amount that is double the money sent abroad.

Salah Khorshed, the chairperson of the parliamentary committee, said the bill was approved by two-thirds of the members of the panel on the condition that the taxes to be imposed on money transfers by low-income expatriate workers “must be low”.

Media reports said the move has been opposed by the Kuwait government, the central bank and financial experts.