MPs give nod for imposing charges on foreign remittances

Manama : The lawmakers yesterday gave nod to impose fees on foreign remittances.

Despite the government’s conservations, a majority of the MPs voted for imposing fees on remittance operations carried out in the country.

This comes as the lawmakers passed an “urgent” proposal previously submitted by MP Mohammed Al Ahmed and a group of other parliamentarians for the second time.

The proposal, which was previously approved by the council’s Financial and Economic Affairs Committee, stipulated that “small amounts of money should be deducted from each remittance process done in Bahrain,” adding that “this step will form a new source of income to the country and contribute in its economic development.”

In his supporting comment to the proposal, MP Dr. Majeed Al Asfoor mentioned in his speech before the council that “if applied, the proposal would greatly benefit the economy and hardly have any effect on expats.”

“There are more expats working in Bahrain than citizens. Their numbers exceeded the 600,000 barrier, according to recent studies. Instead of imposing more taxes by the government, as part of its austerity procedures, such a step could be implemented,” Dr. Al Asfoor said.

However, the Central Bank of Bahrain (CBB) rejected the proposal earlier, saying, “This contradicts with the Kingdom’s policy, which is based on free economy without administrative fees or imposing restrictions.”

CBB did not support the idea as it stated that “it would harm the economy and negatively impact the banking and commercial sectors.”

“Bahrain is considered a regional financial centre and hosts many foreign banks that mainly depend on the leniency of money transferring procedures in the country. If imposed, this new system would drive these establishments away and deprive Bahrain of attracting new foreign ones,” CBB previously informed the panel.

In its comments to the proposal, CBB added, “Imposing charges on remittances would have a bad impact on the foreign employment in the Kingdom and might create new illegal channels to transfer funds abroad. It also contradicts with the steps of developing non-oil revenues that are followed by the government.”     

Meanwhile, proposal passed by the MPs would be referred to the other branch of the legislative authority (Shura Council) for more studying.

MP Al Ahmad told DT News earlier that the proposal suggests taking “tiny percentages” of around 0.5-1 per cent of each remitting process done from Bahrain.

“Official statistics showed that BD2.5 billion is the amount of money transferred abroad from the Kingdom,” Al Ahmed previously stated.