The GCC countries since their respective independence in the 60s and 70s and the advent of oil, have had to cope with increasing demands for foreign employees.  

Having achieved independence and geo-political territorial distribution between the various states, the Gulf region as far as peoples’ employability is concerned, was historically always linked to Britain and to India for more than a hundred years.  The British were as a matter of fact, first to employ Indians expatriates or personnel from the Indian sub-continent at the time to fulfill certain administrative roles in the running of their protectorate programmes of the Gulf.  The Gulf rulers and Co’s, after independence,  carried on along the same lines.

Since then, employment of expatriate workers developed, reaching levels unseen before anywhere in the world.  Approximately 3 million expatriate workers out of 4 million inhabitants populate and are these days present in the Gulf States, apart from Saudi Arabia.  

It seems these days that this has come full circle with the 2 articles that are proposed here below. 

Kuwait to expel foreign government employees aged over 50

Move reportedly to help more Kuwaitis into government positions

By Eleanor Dickinson | Kuwait | Published: 20th December 2015 at 11:36 by Gulf Business

Expatriate government workers in Kuwait aged over 50 will be made to leave the country under new plans to reduce the number of foreign workers, according to local media reports.

The age limit would be applied to public sector workers in professions where roles can be filled by Kuwaitis.

The new measures are to be implemented from March 1 and will cover all nationalities, a government source reportedly said.

Over the last year, the government has been attempting to reduce its reliance on foreign workers, who are believed to make up about 31 per cent of Kuwait’s total population of three million.

In April this year, the government announced plans to freeze the numbers of expats moving to Kuwait, allowing people into the country only to replace those leaving.

Three months later, the government stopped issuing visas to expats’ parents and reduced the validity of a family visit visa from three months to just a month.

Earlier this year, senior Interior Minister Official Major General Sheikh Mazen Al-Jarrah Al-Sabah invited controversy after he said that expats without jobs should be made to leave the country. He later clarified that he was referring to expats who are in Kuwait illegally without jobs – estimated to number between 70,000 and 100,000.

“Kuwait cannot handle the large number of expatriate workers,” he said. “Whoever has a job is welcomed, but there are expatriates who do not have a job…As a country of law, we protect expatriates and their rights. However, those who do not have a job do not have a place among us. This is how it should be, and that is what we believe should be done,” Sheikh Mazen told reporters.

Last year, member of parliament Khalil Abdullah also stated that the Gulf state should deport 280,000 expatriates per year for the next five years to balance its population.

According to the latest InterNations Expat Insider survey, Kuwait was ranked the worst country in the world for expats to live and work.

US expats in UAE may have passports revoked if income unreported

The UAE has signed a deal with the US to implement the Foreign Account Tax Compliance Act from early next year, says financial firm

By Aarti Nagraj | Finance | Published: 21st December 2015 at 08:51

United States expats in the United Arab Emirates could have their passports revoked next month if they fail to comply with their tax and financial obligations under a new act set to take effect from 2016, a US financial firm has warned.

The Foreign Account Tax Compliance Act stipulates that Americans – whether they are resident in the US or not – must report their worldwide income as well as their foreign bank accounts to pay taxes in the US if they opt to retain their passports.

During a visit to Dubai, vice president of US Financial Advisory and Audit Firm Jim O’Niell said: “The UAE has signed a deal to implement the FATCA. The law requires foreign financial institutions to provide annual reports on account information of customers who are US citizens. The act was enacted by the US Congress in 2010 to target non-compliance by US taxpayers using foreign accounts.

“The US law says that American citizens living around the world with a balance of $10,000 at any giving day per year in their bank accounts are required to submit a FBAR [Report of Foreign Bank and Financial Accounts].

“The FATCA also mandates financial institutions around the world to submit annual reports on their customers who are required to comply.”

From early next year, the US’ Internal Revenue Service will compile a list of Americans who violate the new rule, the company said. However, a citizen would not be at risk of losing their passport if they are already in the process of resolving a tax debt issue with the IRS.

It is expected that nearly eight million US citizens who live overseas will be affected if they fail to comply with the act, the firm said. Around 250,000 US nationals are estimated to be currently based in the Gulf region.

The IRS has collected $8bn in taxes and penalties under its offshore account programmes during the past few months, the statement added.

UAE rules out income tax, mulls levy on remittances

Arabian Business of 23 December 2015

The UAE has dismissed plans to start taxing individual incomes but is considering proposals to introduce a tax on remittances, according to the country’s minister of state for financial affairs.

Obaid Humaid Al Tayer told reporters at the Federal National Council on Tuesday: “There is no intention and no plans to impose taxes on the income of individuals in the UAE.”

The UAE has been mulling a raft of tax reforms as it seeks to raise state revenues impacted by low oil prices.

It has already cut fuel subsidies and is planning to impose value-added tax (VAT) on consumer items.

Al Tayer warned taxing individual incomes or remittances could hike up companies’ wage costs and reduce the attractiveness of the UAE as a regional business hub, particularly for expats, according to Gulf News.

As a result, he said, the authorities have ruled out introducing income tax in the UAE.

However, he revealed that the government has begun conducting studies to explore the feasibility of taxing remittances sent home by foreign workers.

The studies are in the early stages and the government will refrain from introducing such a “significant” reform until the proposals are considered in detail, Al Tayer insisted.

He was quoted as saying: “The government may not proceed with such a significant move before they are thoroughly studied in terms of their socioeconomic impacts.

“Any studies will take into account the amount of these remittances and the socioeconomic impact on the UAE’s economy and foreign workers.”

No decision has been taken, nor any legislation drafted, Gulf News added. However, the government is considering introducing corporate taxes, it said.

“We are still studying the corporate tax law, which is still in its initial stages and it is being discussed with local governments and no agreement has been reached so far,” he said.

“The tax takes at least 18 months to be implemented. We need to determine which goods and services are taxed and which are zero-rated. The private sector also needs time and the government needs to take certain measures.”

Al Tayer was speaking after the Federal National Council passed the UAE’s federal budget of AED46 billion ($12.52 billion) for 2016.

Next year’s budget was approved as part of a three-year federal spending plan of AED140 billion for 2014-2016. The balanced budget has revenues and expenditure of AED48.557 billion, Gulf News said.


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