Kuwait News

 

 

KUWAIT CITY, March 19, (Agencies): “Any move to impose taxes on the remittances of expatriates in Kuwait will negatively impact the economy of Kuwait. The lawmakers of Kuwait should conduct a thorough study of the issue before proposing laws in this regard”, says a financial expert from Kuwait.

This is in response to the insistence of several lawmakers to impose taxes on the remittances of expatriates under the hope that it could generate a new source of income for the state, as Kuwait has been dealing with the financial consequences of the fall in the oil prices.

Currently, about 70 percent of the population of Kuwait, which is a total of 4.3 million, constitute of expatriates.

According to one of the proposals in this regard, expatriates will pay two percent for remittance less than KD 100, up to four percent for remittance between KD 100 and KD 499, and five percent for remittance exceeding KD 500.

However, Vice-President of the Money Exchange Association Talal Bahman indicated that such proposed taxes are not expected to bring in any significant revenues for the state but will instead have negative effects on foreign investments which would help the country in diversifying its sources of income. He stressed the need for the state to focus on creating revenue-generating jobs for Kuwaitis, boost its domestic production and reduce imports.

Bahman also stressed the need for lawmakers to be cautious when they propose economic legislation without thoroughly studying their results and impacts on the country as a whole, as several lawmakers have been pushing for ways to confront the current population imbalance, including imposing taxes on expatriates.

Regarding the statement made by MP Safa Al-Hashim in this regard, Bahman urged the lawmaker to review such statements related to the economy before issuing them, as endorsing decisions without conducting proper studies will cause economic burdens that the citizens will have to directly or indirectly bear.

He said, “MP Al-Hashim and those before her who spoke about the size of expatriates’ transactions did not consult the association, which is the official body in Kuwait that deals with this sector and is more informed about the work mechanism and repercussions of any changes to it. Therefore, consulting the association in this regard is a necessity”. He reiterated that the calls to impose charges for the expatriates’ transactions was done without studying its repercussions on the entire economy sector, which consists of more than 40 Kuwaiti companies.

Bahman indicated, “Some of the recent statements represent nothing more than means for collecting funds. In fact, it will result in very less returns and will not represent an actual added value in the national economic balance, or even stimulate the economic situation with a new activity that qualifies to be an income diversification source. Instead, it will end up becoming a new burden”.

He went on to say, “The actual economic reforms should be initiated by opening the way for operational activities and enriching them in order to create job opportunities. Financial returns must be generated through real productive operations that depend on the national manpower as the main factor, while taking into consideration the country’s needs for productive operations”. Bahman added, “It will reduce import of foreign products in favor of the local products, and result in two benefits — reducing the money that leaves Kuwait when buying consumer goods, and creating economic activity which brings real added value on the national economy”.

Apart from the above, he said the proposals of these MPs contradict the moral values upheld by the state and its status of “A Humanitarian Country”. Bahman said, “Kuwait, instead of punishing expatriates, should focus on fostering an attractive environment for them that will encourage them to invest in Kuwait and save their money here. This means providing real investment opportunities which could raise levels of liquidity in the market and will lift up the Kuwaiti economy as a whole”.

He reiterated, “Studies should be undertaken to prepare an economic mechanism which will produce an environment that will lead expatriates to pump their money in Kuwait economy. This mechanism would create a new activity which will stimulate the country’s economy as a whole, far from the idea of levying, which will end up affecting citizens first before the expatriates and leave negative effects irrespective of whether the taxes are implemented or not”.

Bahman warned that taxing remittances of expatriates will force them to opt for alternative ways to send money home such as through black market and money laundering.

To clarify this, he presented six anticipated consequences in case the charges and taxation proposal is implemented:-

■ Expatriates will resort to “black market” to get better prices without paying the taxes imposed on them. This will negatively affect the activities of the exchange companies which are already suffering for the past two years due to illegal exchange market.

■ Expatriates will resort to “Arbitrage” activity, which is a trade that profits by exploiting the price differences of identical or similar financial instruments on different markets or in different forms. This activity is used in maintaining the value of their transactions, which means there will be an increase in the purchase of branded items and a justified increase in demand, which will increase the prices. This in turn will affect citizens.

■ Money laundering through arbitrage and black market which is unregimented and have no limitations.

■ The cost of monitoring and control will increase in Kuwait, because the concerned agencies will need new mechanisms to cope with the changes and collect dues.

■ Skilled professionals will leave the country and seek employment elsewhere in other countries. Such labor force had preferred Kuwait in the first place due to its low per capita economic burden in terms of saving returns.

■ Salary increases due to the increased cost of living, which will be the effective and practical way for a company to retain its expatriate workforce that is always looking for greener pastures elsewhere.

This means such salary increments will have to be covered by citizens.

Source: Arab Times

Link: http://www.arabtimesonline.com/news/warning-remittances-tax-expatriates-negative-impact-economy/

 

KUWAIT: The Prime Minister of Pakistan Mr. Muhammad Nawaz Sharif will pay a two-day official visit to the State of Kuwait from 6-7 March 2017,

The Prime Minister will be accompanied by Mr. Shahid Khaqan Abbasi, Minister of Petroleum and Natural Resources, Syed Tariq Fatemi, Special Assistant to the Prime Minister on Foreign Affairs and Chairman Board of Investment Mr. Miftah Ismail.
 
The Prime Minister’s visit is taking place, particularly at a significant time in the bilateral, regional and global context.
 
During the visit, the Prime Minister will meet the Kuwaiti leadership for in-depth review of various aspects of the traditionally close and brotherly relations between the two countries. The Prime Minister will also address gatherings of select Kuwaiti investors, as well as members of Pakistani community residing in Kuwait.
 
Amir of Kuwait, His Highness Sheikh Sabah Al Ahmed Al Sabah, will receive the Prime Minister in Bayan Palace for a detailed meeting, on Tuesday 7 March 2017. The Prime Minister will hold delegation level talks with the Prime Minister of Kuwait, His Highness Sheikh Jaber Al-Mubarak Al-Hamad Al-Sabah. Important regional and international issues of mutual interest are expected to come under discussion during the visit.
 
Prime Minister  Nawaz Sharif will also meet the Speaker of the Kuwaiti Parliament, His Excellency Mr Marzouk Al Ghanim. Pakistan-Kuwait parliamentary relations have seen enhanced cooperation in recent years.
 
In each of these meetings, the Prime Minister will exchange views with the Kuwaiti side to further expand the existing level of cooperation between Pakistan and Kuwait in diverse sectors. These include promotion of bilateral trade and investment and upgrading the well-placed institutionalized cooperation in the fields of petroleum and natural resources, financial sector, defence, export of manpower, health services, industrial sector, and media and information technology etc. Both sides will also review the progress made so far under various existing Agreements and MoUs in various fields.
 
Prime Minister Nawaz Sharif will also address a group of leading Kuwaiti investors and businessmen. Kuwait is a leading GCC investor in Pakistan. This visit will provide a useful opportunity to highlight the lucrative business environment available in Pakistan to foreign investors, in diverse fields. The Prime Minister will underline the unique role Pakistan can play as a bridge to promote connectivity and economic progress among its neighboring regions, including the GCC countries.
 
The visit will also prove useful in highlighting the role and exemplary services of over 114,000 Pakistani community members who have contributed to various sectors in Kuwait.  The community contributes towards progress and prosperity of both Kuwait and Pakistan. The Prime Minister will address a select gathering of Pakistani community members residing in Kuwait.
 
Prime Minister Nawaz Sharif’s visit to Kuwait is part of the regular high level exchanges between the two sides. On the invitation of Prime Minister Muhammad Nawaz Sharif, Kuwait’s Prime Minister Sheikh Jaber Al-Mubarak Al-Hamad Al-Sabah had undertaken an official visit to Pakistan on 10-12 November 2013, to commemorate the 50th anniversary of establishment of bilateral diplomatic relations. He was the first Head of Government from a GCC country to visit Pakistan, after Prime Minister Muhammad Nawaz Sharif took office in May 2013.
 
Pakistan and Kuwait enjoy cordial and brotherly relations. Kuwaitis have always appreciated Pakistan’s support in the rehabilitation process in 1991 following Iraqi occupation of their country. Pakistan and Kuwait also cooperate extensively in the multilateral forums including at the UN and OIC. Both sides also have shared perceptions on most international and regional issues.

KUWAIT CITY, Feb 20: The government may decide to repeal all forms of subsidy by March 2020 if it implements the remaining aspects of the recommendations contained in the report of Ernst &Young, which the Ministry of Finance assigned to prepare the roadmap for subsidy reform, reports Arab Times daily.

A source noted the report was ready a few months ago but was kept under wraps to avoid undue parliamentary reaction, adding its implementation is not binding until all concerned authorities approve of it.

He explained that the government had already applied certain aspects of the recommendations regarding fuel, electricity and water subsidies. He also said power subsidy forms around 71 percent of subsidies in Kuwait. Four major steps have since been proposed for future action.

The steps include gradual reduction in the rate of fuel subsidy, and prices of electricity and water will also be increased gradually to reduce the rate at which a raise in prices will affect consumers and the economy. As for aviation fuel, the report advised the government to remove subsidy for foreign companies since it appears the purpose of doing that has not been met.

However, there must be a way of assisting it to be competitive in the international market before removing its subsidy. The last of the four steps is about liquefied gas whose price the report recommended a thorough study to restore its proper market value.

The report recommended gradual removal of subsidies from other sectors such as the overseas medical treatment, which covers about 6 percent of the subsidies.

The same recommendation was for education sector that consumes 4 percent of the subsidies, in addition to social welfare that consumes 5 percent of subsidies, rent allowances that covers 4 percent, social aid that accounts for 1 percent and inflation allowance 4 percent. Others include financial support of 3 percent, media support of around 0.01 percent, and agriculture and fishing sector that consumes less than 1 percent of the entire subsidies.

KUWAIT CITY, Feb 21: Mubarak Al-Kabeer Governorate will serve as the first pilot study coverage area in the issuance of Municipality licenses online beginning next week while the remaining five governorates follow suit later in the year, reports Al-Anba daily quoting Minister of Awqaf and Islamic Affairs, the State Minister for Municipality Affairs Mohammad Al- Jabri as saying.

In his first media chat since assuming office, the minister said he has filled many vacant supervisory posts in the Ministry of Awqaf and Islamic Affairs, as well as the State Ministry for Municipality Affairs, affirming he will never accept injustice against any member of society and each person will get whatever he deserves.

He reiterated the only criterion that is important to him for such an appointment is competency, indicating he passed the same message to officials of both ministries and he’ll deal with each individual based on performance rather than affiliations.

He encouraged employees to submit petitions whenever they are mistreated or cheated on, because he plays an open door policy in his administration. He stressed the ministry will sort out problems associated with mosques, which are supposed to be purely for worshipping. He indicated Kuwait Awqaf Public Administration will fund the construction of all mosques.

He hinted two different investigative committees have been set up in the two ministries, while a joint committee will investigate the demolition of electricity room at a mosque in Block 1, Sulaibiya. He assured the demolition of mosques is unacceptable. He assured all clerics are playing their roles in various mosques as expected— in line with the right moderation in Islam away from exaggeration and extremism. He also said new entitlements for Imams and preachers will begin from April.

 

KUWAIT CITY: Civil Service Commission (CSC) has declared next Saturday and Sunday as public holiday on the occasion of the National Days celebration, and normal work will resume on Monday Feb 27. Consequently, public sector employees will have a three-day break starting from Friday.

In a circular, CSC stated the Council of Ministers has decided to grant workers in all government departments and agencies holiday to celebrate the Liberation and Independence Days on Saturday and Sunday respectively.

It called for departments with peculiar nature of work to fix the holiday of their workers in a way that serve the interest of the public.

KUWAIT CITY, Feb 21: The National Bureau for Academic Accreditation and Quality of Education has decided to withdraw 3,000 master-degree holders in Ministry of Education and some private universities because they obtained their degrees from unaccredited universities that are not included in the accreditation list of the bureau, reports Al-Shahed daily.

Meanwhile, the General Education Sector of Ministry of Education has launched four new educational supervisory functions, which includes assistant director of kindergarten, principal of primary school, instructor of chemistry, biology and music, reports Al-Rai daily quoting informed sources. They revealed that the step was taken due to work requirements and shortage of staff.

Meanwhile, Undersecretary of Ministry of Education Dr Haitham Al-Atari has declared that the ministry will hire male and female teachers from Jordan and Egypt to work in the General Education Sector in the next academic year 2017/2018.

The sources revealed that the ministry has requested Ministry of Foreign Affairs to inform the Kuwaiti embassies in the aforementioned countries to publish advertisements in the local newspapers, adding that the two embassies will receive applications until the concerned committees will arrive to take interviews of the applicants.

KUWAIT CITY, Feb 21, (AP): Kuwait’s first new government hospital in more than three decades will soon open its doors — but only to Kuwaiti citizens. It’s the latest in a series of steps targeting foreigners, including laborers who build high-rise towers, sweep the roads and clean toilets in this tiny oilrich emirate: a group that far outnumbers the native population.

The 304 million dinar ($997 million) Jaber Hospital, about a 20-minute drive from downtown Kuwait City, is expected to open in the coming months. It will be the first government hospital built in Kuwait since 1984, taking some pressure off an overburdened public health system.

US ally Kuwait, like other oil-rich Arabian Gulf states, has for decades offered a free cradle-to-grave health care for its citizens, along with plenty of generous perks such as subsidized utility prices and housing grants.

But services have been fraying in recent years — despite the cushion of several hundred billion dollars that Kuwait has been building since the 1970s, mostly in a fund for future generations.

That money, which stays out of the state budget, is meant to provide for Kuwaitis when the oil runs out. It carried Kuwait through the expenses of the seven-month Iraqi occupation and the 1991 US-led Gulf War that liberated it.

Expatriates with residency and work visas in Kuwait get subsidized health care. A foreign laborer — usually from another Arab country or an Asian migrant — would pay 1 Kuwaiti dinar ($3.2) to see a doctor at a public hospital. His employer would typically pay for him an annual health insurance to the government of 50 dinars, or about $160.

Western expats who live and work in Kuwait tend to go to private hospitals as part of lucrative health care packages provided by their employers. Many see the new, citizens-only hospital as a step too far. “They were granted their workers’ visa. They deserve to be treated with dignity,” Dr Yousef al-Muhanna, a 34- year old general surgeon, said of the migrant workers.

The discrimination goes against the Hippocratic Oath, he says. “We are not supposed to look at their passports – we are supposed to deal with their medical conditions.” The shift started sometime last year, when hospitals and clinics in Jahra, west of the capital, and the Amiri Hospital in Kuwait City began barring expatriates from morning visits for nonemergency services.

Recently, lawmaker Safaa al-Hashem told the media in Kuwait’s parliament that “expats are crowding our hospitals and competing with us for the air we breathe in hospital waiting rooms.” She complained that many foreigners bring families on visitor visas to enjoy Kuwait’s health care benefits, including deliveries, gastric bypass surgeries, cancer treatment, and other procedures. “Isn’t time for us to put an end to this? We must reform the current system; we must impose taxes on expatriates, not on Kuwaitis,” she said. It’s not just the health care.

Kuwait’s government and politicians have grown more wary of foreigners in other sectors as well in recent years, adopting or promoting a series of policies that target the roughly 3 million expats living and working here.

Legislation last April increased the price of electricity and water in all residential buildings, but exempted Kuwaiti nationals. Social media posts and tweets by Kuwaitis and even statements from officials blaming expats for everything — from traffic congestion to the raiding of open buffets by wedding crashers — are becoming all too common.

Earlier this month, when Egypt beat Burkina Faso in the first semifinals match of the soccer African Cup of Nations, Kuwait’s ministry of interior warned Egyptian expats — one of the largest Arab communities here — against celebrating their team’s win with car parades.

The traditional parades are a raucous event, with soccer fans driving around honking their cars, music blasting and flags waving from car windows. The ministry said it would immediately deport anyone who takes part in “illegal parades” — so the Egyptians kept their partying off the streets. “As an Arab expat, when you go to the West, they call you a terrorist or refugee,” said Egyptian architect Waleed Shalaan, who has been living in Kuwait since 1999 and considers it his home. “You go to the Gulf states, they call you a leech or a parasite.”

Recent law changes require foreigners to have a minimum monthly salary of 400 Kuwaiti dinars ($1,309), and spend two years in Kuwait before applying for a local driving license — with the exception of some professions such as doctors, journalists, university professors, and engineers. Housewives and students may not drive, and anyone caught driving without a license can be deported.

Only tourists and others on a visitor’s visa can drive with an international license. After al-Hashem’s “air we breathe” comment, fellow lawmaker Abdulkareem al-Kandari called for a special session of parliament to discuss what he called the “alarming increase in the number of expats versus Kuwaiti nationals.” “We refuse to be a minority in our own country,” he said — though Kuwaiti nationals already are, with foreigners making up about 70 percent of the population of 4.2 million. Several lawmakers demanded the government deport 100,000 expats annually to balance the country’s demographics.

Without offering details, Hind al- Sabeeh, the minister of social affairs, promised a plan to “balance the demographics of the country over the next five years, without disrupting the balance of work.” Hind Francis, an analyst at the Rai Institute think tank, said xenophobic sentiments have been on the rise in Kuwait as a way to deflect blame from the authorities.

“Many big problems that concern the public are blamed on the expatriates: congested roads, overcrowded hospitals, many areas in which public policy has failed,” she said. Sarah al-Qabandi, a 35-year old corporate social responsibility manager in the private Ooredoo Telecom says that blaming Kuwait’s problems on the expats is a shame. “We expect people abroad to treat us like royalty … we want to be treated well, and yet we don’t welcome anyone in our own country,” she said.

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