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UAE expats may be hit by proposed remittance tax
| Published: | 30 Sep at 6 PM |
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A proposal at present under consideration by the Dubai government is expected to hit expats working in the emirate and sending money home.
Chamber of Commerce and Industry president Hamad Buamim has confirmed that the proposal is under serious consideration, although the government has yet to receive feedback from the emirate’s financial institutions and banks. If brought into law, all expat workers who send money back to their home country can expect each remittance to be taxed.
Details as to the amount of tax levied and those affected have yet to be confirmed, and Buamim believes that the imposition of a tax will not stop the remittances. However, he added, it will have an effect on expat consumer spending.
About 90 per cent of the eight million residents in Dubai are expats, with the majority made up of labourers from third world countries in Africa and south Asia. Many families in workers’ home countries depend on the remittances for their survival, with local financiers fearing that taxing them would lead to a shortage of workers from overseas.
According to the UAE’s Central Bank, around $12.3 billion was remitted overseas by expat workers in 2012, a considerable increase on the 2011 totals. The proposed tax is, if agreed, expected to increase the number of jobs available to unemployed local workers, although there is some doubt as to whether Emiratis would be prepared to work as labourers in the construction and similar industries.
Chamber of Commerce and Industry president Hamad Buamim has confirmed that the proposal is under serious consideration, although the government has yet to receive feedback from the emirate’s financial institutions and banks. If brought into law, all expat workers who send money back to their home country can expect each remittance to be taxed.
Details as to the amount of tax levied and those affected have yet to be confirmed, and Buamim believes that the imposition of a tax will not stop the remittances. However, he added, it will have an effect on expat consumer spending.
About 90 per cent of the eight million residents in Dubai are expats, with the majority made up of labourers from third world countries in Africa and south Asia. Many families in workers’ home countries depend on the remittances for their survival, with local financiers fearing that taxing them would lead to a shortage of workers from overseas.
According to the UAE’s Central Bank, around $12.3 billion was remitted overseas by expat workers in 2012, a considerable increase on the 2011 totals. The proposed tax is, if agreed, expected to increase the number of jobs available to unemployed local workers, although there is some doubt as to whether Emiratis would be prepared to work as labourers in the construction and similar industries.
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