The heady days of sky-high incomes and low expenses are already long over for the millions of expatriates who flock to Dubai and Abu Dhabi to make their fortunes, but another big draw, tax-free income, might be on the chopping block.
According to Arabian Business, a member of the United Arab Emirates' Federal National Council has put forth a proposal to tax the remittances sent home by the nearly 4 million expats working in the country.
“The Federal National Council and the Ministry of Finance should produce a package of creative measures to bolster the country’s revenues, including a tax on remittance of the billions of dirhams which foreign workers send back to their home countries every year,” Ali Jasem told the council, according to Arabian Business.
While this wouldn't be an income tax, per se, it would greatly affect workers' ability to return home with a tidy nest egg after working in the Gulf. The steadily rising housing costs and living expenses in the glittery capital Abu Dhabi and the glamorous Dubai have already put a dent on their ability to draw foreign talent.
According to Gulf News, foreign workers transferred a net 45.1 billion dirhams ($12.3 billion) out of the country last year, a big target for a country looking to expand its revenue in the face of dwindling oil and gas production.
However, Obaid Humaid Al Tayer, minister of state for financial affairs, worked to downplay the seriousness of the proposal, insisting that at this point it was just the personal suggestion of a member of the council.
“The government may not comment on issues of such significance before they are throughly studied in terms of their socioeconomic impacts,” Tayer told Gulf News.
As scary as an end to tax-free salaries might be for expats in the UAE, this proposal seems unlikely to move forward as long as Doha maintains its own tax-free regime.