A draft law was submitted today to impose 5% tax on expats for remittances sent to their home country. Financial and economic affairs committee went ahead and approved the bill and now have sent it to assembly for approval.
Sources said that earlier legal and legislative committee and the government had rejected the bill on basis of the economy will be hurt, but the Financial and economic affairs committee said that it is within the constitution and there was no violation.
According to Article 8 of the agreement for establishing International Monetary Fund (IMF), it is not allowed 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 will lead to negative traits.
Via: Arabtimes Online
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