Friday, May 10, 2019
Legislation has again been tabled before Kuwait's legislature to introduce a tax on expat remittances.
Kuwait has long been considering the introduction of a tax on expat remittances, dropping proposals for such previously in 2017, shortly after the Central Bank criticized the measure.
However, the proposal has again been submitted for parliamentary approval in line with the previous proposal – that expat remittances exceeding KWD500 (USD1,640) should be subject to a five percent tax.
The tabling of the draft law follows endorsement from the National Assembly's financial and economic affairs committee, which said the measure is constitutional.
Previously, the expat tax was being considered alongside the introduction of value-added tax. Reports in April 2019 said the Kuwaiti Government has finally agreed to move forward with the introduction of the harmonized Gulf Cooperation Council value-added tax framework starting April 1, 2021.
An-Nahar daily, a daily published in Lebanon in Arabic, reported that it had seen a report confirming that the levy would be introduced from the beginning of the 2021/22 fiscal year.
The GCC selective tax, levied on sugary drinks and tobacco, will be levied starting April next year, it said. Under the levy, soft drinks and energy drinks are subject to a 50 percent rate, while tobacco is subject to a 100 percent rate.
The selective tax, which is to be rolled out eventually by all countries of the Gulf Cooperation Council – Kuwait, Bahrain, Qatar, the United Arab Emirates, Oman, and Saudi Arabia – was approved on June 16, 2016, alongside the GCC value-added tax. So far just the United Arab Emirates and Saudi Arabia have introduced the harmonized VAT, which features a five percent headline rate.