Kuwait News: May soon Cease to be Tax-Free, $496Bn stashed abroad

The News reported these two incidents separately, I had the savvy to put two-&-two together for the Big Picture.

Kuwait may soon cease to be tax-free (according to a report from the IMF – International Monetary Fund [the Rich Bank]) and, after news came out that there is approximately $32 Trillion stored in offshore bank accounts (tax havens) by the world’s wealthy, Kuwait’s share of the pie is $496 Billion, the highest in the Region.

Firstly, the IMF; remember the sexual harassment scandal of their previous head, Dominique Strauss-Kahn (link) and replaced by Christine Lagarde (link)? They are the big bank that bails out countries, but for a price. They get a say in the economic policies governing said “debtors”, until such time the loan is repaid in full.

The IMF informed Kuwait that, at the current rate of government spending, the proverbial well may “dry up” by 2017. Hence, Kuwait needs to impose a tax infrastructure in order to have a safety net of sustainable revenue should this occur (well of course the government is having difficulty! There’s over $496 Billion (i.e. KD 140 Billion) lying in offshore bank accounts!)

For those of you not good with zero’s, here’s a quick looksie at the size of funds we are talking about:

KD 140 Billion.. wow

Here is the link to the above story (careful its in Arabic though).

Which brings us to our next item; the funds hidden abroad. Basically, these are funds moved out by Business Owners (and not the expats repatriated revenues, salaries etc) which should technically be in circulation in Kuwaiti Banks. After all, how do you think banks earn their revenue? Your current balance is not really there, its being invested in a million and one funds to earn revenue for the bank as well as its depositors, when you take that money out and place it elsewhere, the bank loses that income generating ability, savvy?

$496 Billion, tops the region

Here is the (link) the story above, again, in Arabic.

So now we wait.

Passports & CVs ready.

 

August 2011 ( View complete archive page )

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