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Message: <blockquote data-quote="ibnanv" data-source="post: 23029163" data-attributes="member: 218596">Draft law stipulates prison, fine for using back channels to send money abroadManama: A Kuwaiti parliamentary committee has endorsed a draft law to  impose taxes on remittances by expatriates in the country.This came  despite recommendations from the government, the central bank and  financial experts against such a move.The members of the financial committee voted four to one to refer the bill to the parliament for debate among its members. If the draft is approved, it will be referred to the government and in case the cabinet accepts it, it becomes law.The legislative committee had earlier rejected the draft, saying that it was unconstitutional.The  Central Bank said that imposing taxes on remittances would harm  Kuwait’s reputation, weaken the financial situation in the country,  affect the fight against money laundering and terrorism and create a  parallel black market for sending money home.However,  Salah Khorshid, the chairman of the financial committee, said that they  had taken into consideration the views of consultants, legal experts  and a constitution specialist to ensure there were no breach of the  constitution.He added that the government had reservations about  the bill “because it has the intention of imposing taxes on both Kuwaiti  citizens and expatriates,” he added.However, the committee said that taxes should be levied only on foreigners.Such  a decision would help provide the state with KD70 million from the  remittances that amounted to KD 19 billion, he said, quoted by Kuwaiti  media.Khorshid argued that three other Gulf Cooperation Council (GCC) countries had a law permitting taxes on remittances.The GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.“Banks  and moneychangers take fees on remittances, and the government should  be the one to take them, especially that the figures that we see make us  keener on the money and on the interests of the state,” he said, quoted  by Kuwaiti daily Al Jarida on Monday.MP Saleh Ashoor,  the financial committee rapporteur, said that extensive consultations  with experts and advisors confirmed that the draft law was fully  constitutional.Article Three of the draft law gives the Central  Bank the right to see that the tax money is transferred to the Ministry  of Finance, he said.Under Article Four, any bank or moneychanger  that does not comply with the law will be fined a maximum of KD10,000  while anyone who remits money not through the accredited banks and  moneychangers will be sent to prison for a maximum of five years and a  fine that amounts to the double of the money sent abroad.Under  the draft law, remittance taxes will be gradual with a one per cent tax  for remittances of up to KD90, two per cent for KD 100-200 remittances,  three per cent for KD 300-499 and five per cent for KD 500 and more.The remittance tax will be in addition to the commission charged by moneychangers and banks.Several  analysts who opposed imposing taxes on remittances have warned against  the development of a black market and back channels that allow  expatriates to send money home faster and at more convenient rates.</blockquote>

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