Gulf Arab states rely on oil revenues to fund their budgets, and is considered
one of the largest sources of foreign remittances in the world



Remittances from expatriates in the range of tax services for the Gulf States

12/06/2016
Roudao - Erbil

Back to talk again about the possibility of the imposition of the Gulf Cooperation Council ( GCC ) tax on the estimated billions of dollars in remittances, sent by foreign workers to their home countries each year, amid controversy among experts and observers between supporters and opponents of the tax.
This came at a time when the International Monetary Fund report in which he said, last month, said that the imposition of the Gulf states for taxes on foreign remittances of foreign (representing more than 90% of the total number of employees in the private sector), involves a lot of negatives.
And it relies Gulf Arab states on oil revenues to fund their budgets, and is considered one of the largest sources of foreign remittances in the world, and such transfers exceeded $ 100 billion last year, according to figures from the central Gulf banks.
Saudi Arabia, comes "the second largest country after the United States in the volume of foreign remittances" ranked first among Gulf states worth $ 43 billion, followed by the UAE with 33 billion, Kuwait $ 15 billion, Qatar $ 11 billion.
According to recent estimates of the International Monetary Fund, the volume of annual transfers to foreigners from the Gulf states about $ 84.4 billion, noting that a tax of 5% on such transfers, will result in revenue of up to 0.3% of the GDP of the Gulf, or $ 4.2 billion.
The head of economic affairs in the former DIFC, Nasser Saidi, in a press statement, "The Gulf states may resort to imposing a tax on foreign remittances, so as to increase the revenues of non-oil and the face of declining oil prices," denying that have a negative impact on the attractiveness investment Zone.
Saidi added, "The reason why the Gulf states to consider a tax on foreign remittances mode, is to look for another financial returns with the continued decline in oil and gas prices."
He Saidi, who previously served as Minister of Economy and Trade of Lebanon, that "there are discussions between now and then here or there, but so far has not announced any Gulf country intention to apply that tax."
For his part, the Saudi economic expert, preferred Albuainain, in a press statement, that "expatriates' remittances are still considered one of the most important emerging from Gulf financial flows, and has become a financial burden on the economies of the region affected by the revenues from the export of oil and gas between 50 and 60% due to falling world prices. "
Albuainain He said that "in light of current economic conditions, the premise of the adoption of taxes on remittances really become apprehensive, despite many of them legitimate."
He added: "which is linked to the imposition of a tax on transfers in the Gulf Resolution, holds two aspects, the first positive as Sarphi new revenue the state treasury, and the other negative leads to the emergence of a parallel market (black) of remittances."
He said Saudi economist, said that "there are other alternatives to the Gulf states, instead of resorting to the imposition of the tax, which is dealing with transfers in accordance with the international prices of the Exchange, as applicable system deprives the State of the large profit margins treasury exchange companies and banks intervention, higher than the same amount of tax." .
He criticized the "Albuainain", the International Monetary Fund warnings of negative foreign transfers of tax applied to the Gulf economy, especially since the Fund itself welcomed the previously-added tax to be applied early in 2018 to diversify non-oil revenues.
The International Monetary Fund also warned in his latest report that the imposition of a tax on foreign remittances will result in administrative and operational costs, may reduce revenue, as well as risks relating to the reputation of the state between the workers, the competitiveness of the private sector and the decline, as well as restrictions on the banking sector, and the multiplicity Exchange rate.
And live more than 17 million foreigners in the six Gulf Cooperation Council (GCC), and brings the total number to 23 million or more, after the addition of individuals expats families, equivalent to nearly half of its population of 48.8 million, according to the statistical center figures of the Gulf Cooperation Council.


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