Mr 5%

One of the proposals newly made to cover up for the government’s financial deficit is to impose a five percent tax on the sums expatriates transfer back to their home countries. Such a proposal will surely create a new totally unjustified wave of criticism, not only because such a bill lacks real economic value, but also because of the considerable psychological and financial damage scores of thousands of poor helpless expatriate laborers might suffer. In addition, this project might pave the way for another moral corruption project, especially with the prevalence of corruption everywhere.

To start with, assuming that the average monthly salary an expat gets varies between KD 500-750, which is already much exaggerated because a vast number of them still get no more than KD 50 a month, the total monthly income of around 3 million expats would be KD 1.5 billion, and thus monthly transfer taxes would be KD 70 million a month and KD 700 million a year, which seems to be a large figure.

This added value can used in a good way if it was allocated for real development projects, infrastructure or even developing the services expats themselves get, including accommodation and healthcare. But our Kuwaiti experience does not actually reflect such tendencies because employees will be the ones responsible to pay that tax one way or another while the services expats provide us with, starting with construction labor, tire technicians, barbers, tailors, beauticians, electricians, pipe fitters and all the way to doctors and engineers will be increased far beyond that percentage and simple citizens will end up as the only ones affected by this tax.

What is even more dangerous is that this proposal will create a new moral problem by creating a new type of ‘financial transfer merchants’, especially since Kuwait had already experienced utilizing human beings and the state’s political and financial resources with patronage from the government itself through using ‘hundreds’ of standards in viewing similar situations. We had experienced very strange names such as ‘visa traffickers’, weapon traffickers and agency traffickers who had all benefited from handsome commissions they got for deals the state made to recruit foreign labor, government tenders or weapon deals. They looted considerable percentages from such trade and made easy and fast money that made them very wealthy.

The KD 700 million sum collected from transfer taxes might end up in those influential people’s pockets and a few pennies might leak to ordinary citizens who might offer to transfer the money under their own names in return for fewer taxes than the official 5 percent. So many tricks will be used and it might not be strange if we see some ads offering money transfers for as low as one or two percent fees, which would be very tempting to many expats, leaving the government out of the equation with no benefit at all. – Translated by Kuwait Times from Al-Anbaa

By Hassan Abdullah Jouhar

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