The Proposed Tax on Remittances will Drive Flows Underground
Recently, some news outlets in the Gulf region have hinted at the possibility of the UAE government imposing a tax remittances. In the GCC countries foreign workers constitute a large portion of the total population. Remittance outflows from the GCC countries have surpassed 70 billion USD in 2011 making the region rank as the largest remitter in the world. With such significant remittance outflows, the rationale behind imposing a tax is to keep a portion of the money leakages as potential investments in the domestic economy.
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