5% Tax on Expats transferring money, at the verge of approval
A draft law was submitted to impose 5% tax on expats for remittances sent to their home country. Financial and economic affairs committee approved the bill and send it to the assembly for approval.
Sources said that earlier, the bill was rejected by the legal and legislative committee and the government on the basis that the economy will be hurt, but the Financial and economic affairs committee said that it is within the constitution and there is no violation.
According to Article 8 of the agreement for establishing International Monetary Fund (IMF), it is disfavour for any member country to take discriminating procedures in terms of currency exchange or participation in activities that result in multiplicity of currency prices.
Although IMF has warned in past that this decision on money transfer by expatriates in the entire Gulf region is $84.4 billion and the 5 percent tax will make up only 0.3 of the total income of the Gulf countries so it will not give any reasonable improvement to the economy. IMF had also stated that this move would lead to negative traits.
Courtesy: Arab Times
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