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Draft bill fines and imprisons Kuwaiti expats who fail to pay remittance tax

The news that expats working in Kuwait are now subject to anywhere from a 1-5% surcharge every time they send money abroad, spells bad news for workers there.

It must have been a hard pill to swallow for many, knowing that steep fines and prison times await those who try black market practices to avoid paying it.

How are the proposed fees structured?

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Scale of the damage  

Kuwait’s financial and economic affairs committee approved the new bills, Kuwait News Agency KUNA reported.
In a statement, Committee Chairperson, Salah Khorshed, said that the commission structured the new taxes in a way to ease the pain on low-income expats.
Fes will be split among salary categories as follows:

$300 salaries will be taxed  at 1%
$333 to $667 salaries will be taxed at 2%
$1,000 to $1,665 salaries will be taxed at 3%
$1,668 to $5,550 salaries will be taxed at 5%

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Income to the state

Khorshed said the commission approved the bills with consent of two-thirds of the members.

According to Khaleej Times, he forecast proceeds amounting to $233 million from fees on remittances estimated to total $63 billion per year.


In a report by Gulf News, the daily said the decision came despite recommendations against such a move from the government, the central bank and financial experts

“The Central Bank said that imposing taxes on remittances would harm Kuwait’s reputation, weaken the financial situation in the country, affect the fight against money laundering and terrorism and create a parallel black market for sending money home,” the daily reported.

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But Khorshid explained: “Banks and moneychangers 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” he said, quoted by Kuwaiti daily Al Jarida Monday.

Under Article Four of the draft law, any bank or moneychanger that does not comply with the law will be fined a maximum of $33,343 while anyone who remits money not through the accredited banks and moneychangers will be sent to prison for a maximum of five years and a fine that amounts to the double of the money sent abroad.

“The remittance tax will be in addition to the commission charged by moneychangers and banks,” said Gulf News.