KUWAIT CITY: Kuwait’s top lawmakers proposed a new legislation to impose a fee on foreign remittances, despite being warned by the government and central bank that the bill would be counter-productive, according to a report published in The National newspaper.
The parliament’s financial and economic affairs committee voted four to one to pass the bill, which will be subject to National Assembly discretion before moving to the government for approval.
The Central Bank of Kuwait advised against the move saying the law could weaken the financial stability of the country and bolster the black market for remittances, according to local sources.
The law stipulates that those making up to KD99 (Dh1,214) would be subject to a one per cent fee; the KD100 to KD200 segment to two per cent; the KD 300 to KD499 bracket will be taxed three percent, and those making more than KD500 will be taxed five per cent.
The council opted not to include the Kuwaiti government’s suggestion that the law be applied to both residents and citizens.
Salah Khorsheed, the MP who serves as head of the financial committee, said the decision to propose the bill was made only after analysing both the humanitarian and legislative aspects of the proposed law.
“Our intention was to make sure that the fee on the lowest-income earners bracket would be much less than those who are higher to ensure that those making more would be compelled to reinvest their earnings in Kuwait,” he said.
Mr Khorsheed predicts that the fee could amount to KD70 million from remittances. He said the committee found that approximately KD19 billion was sent abroad over the last five years.
