UAE may soon impose tax on remittances. The UAE is considering whether to impose a tax on the money that expatriates transfer to their home countries every year, government and banking sources said on Friday. A circular discussing the proposal and requesting feedback was sent to certain banks and financial institutions in the country, the sources said, speaking to Reuters on condition of anonymity, because of the sensitivity of the subject. “It is a pilot project and is in the initial stages. Based on the feedback from banks and others, a decision will be taken,” says a Ministry of Finance source. According to news reports, this proposal reflects growing concern that Gulf countries are becoming too dependent on foreign workers and are losing a majority of their wealth, in the form of remittances abroad. Expat employees in the UAE transferred a net total of AED45.1 billion out of the country last year, up from AED41.2 billion in 2011, according to central bank data. Would expats stay in the UAE? Most people become expats due to financial concerns, so there is no doubt this decision would have an effect on the attractiveness of the country – but will it be enough to drive them away? After all, there is no income tax in the country and that still remains a major attraction for foreigners living and working here. Whether or not expats would continue to live and work in the UAE after such a tax is imposed is, at this point, a difficult question to answer. It would largely depend on the nature of the tax and how much money expats would ultimately have to give up. How do you feel about this proposal and would it change your plans of living and working in the UAE?
Posted on: Sun, 29 Sep 2013 17:37:35 +0000
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