State of Expat Affairs in Kuwait

The past week was filled with tumultuous news regarding certain new laws that an English Daily Newspaper saw fit to publish before checking its accuracy.

It was mentioned that the State of Kuwait was in deliberation to impose income tax on expats, along with a ceiling on remittances to home countries (link).

Sources explained that once the system is implemented, the foreigners residing in Kuwait will be required to pay tax on their incomes and remittances. 

Sources said the ministry also intends to lay down a mechanism for limiting the foreign remittances by prohibiting expatriates from remitting more than the monthly salary mentioned in their files at the Ministry of Social Affairs and Labor.

Later, the daily went ahead and refuted the news saying it was premature (link).

It was a dear teacher back in middle school that said, the reason expats come to Kuwait is a 3-letter word ending in X, and it is NOT the first thing you think of.

Had this archaic proposal found truth and fruition, it would pave the way for the following:

Firemen would refuse to attend calls in areas that are not predominantly Kuwaiti.

Policemen would ignore cases of theft, murder, rape, arson etc. that affect expats.

 

Doctors and nurses in Public hospitals would refuse to treat expat patients.

If you draw a line that segregates the treatment between expats and locals in terms of finance, then that line will quickly seep its way into all other sectors creating a Dystopian Society where foreigners are punished for traveling abroad for employment.

Of course the other issue currently making the rounds on the tables is a draft bill obliging all government establishments, cooperative societies, public utilities and institutions of civil society to give priority to hiring citizens, retirees, children of Kuwaiti women, spouses of Kuwaitis and Bedouns, requiring a ban on recruiting expatriate personnel in the government authorities except for jobs such as cleaning and rare specialties to curb unemployment while increasing the income of Kuwaiti families. (link)

In Economic terms, this is referred to as Protectionism.

In the long term, trade protectionism weakens the industry. Without competition, companies within the industry won’t innovate and improve their products or services. There’s no need to. Eventually, consumers will pay more for a lower quality product than they would get from foreign competitors.

By limiting the applicant pool, one runs the risk of not hiring the right person for the job. It is also probably the main cause behind the phenomenon known locally as Wasta (or nepotism).

August 2011 ( View complete archive page )

September 2011 ( View complete archive page )

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