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Every time remittances break a record, the same tax proposal returns. The Central Bank spent a decade explaining why it fails, and the licensed exchange sector is the reason its argument holds.
Expatriate workers in Kuwait sent home KD 5.1 billion in 2025, according to Central Bank of Kuwait data, an increase of roughly KD 784 million on the year before and annual growth of just over 18 percent, the highest figure in four years and within reach of the 2021 and 2022 peak above KD 5.4 billion. The flow ran evenly through the year, between KD 1.21 billion and KD 1.32 billion every quarter, through a regional war included.
If history is a guide, that number will now do two things. It will confirm the strength of Kuwait’s labour market, and it will revive the oldest bad idea in Kuwaiti fiscal politics: taxing the transfers.
The proposal has surfaced in every cycle since oil prices broke in 2015. Successive drafts put tiered levies of 2 to 5 percent on outbound transfers, with projected revenues that never exceeded a few tens of millions of dinars a year, a rounding error against a fiscal deficit the World Bank estimates at 2.5 percent of GDP in 2025. Parliament’s own legislative committee rejected the bills repeatedly on constitutional grounds, and they never became law. The temptation, however, is structural, and the current fiscal moment sharpens it: Kuwait has already implemented a 15 percent tax on multinational profits, passed its long-awaited financing and liquidity law, and is openly hunting non-oil revenue. A headline remittance record is exactly the kind of number that reopens the file.
Which is why the Central Bank’s standing objections are worth restating, because they have aged into orthodoxy. The regulator’s position, recorded when parliament last pressed the idea seriously, ran on four tracks: a levy would conflict with the free convertibility of the dinar enshrined in the 1968 currency law; it would sit uneasily with Kuwait’s IMF Article VIII commitments on current international transfers; the headline figure is misleading in the first place, since it includes citizen transfers and commercial flows alongside worker remittances; and, most decisively, taxing the formal channel would not stop the money moving. It would move the money out of sight, into hawala networks and informal couriers, beyond the reach of anti-money-laundering supervision, and it would resurface as wage demands and higher prices at home.
That last argument is no longer theoretical. When the regional conflict reached Kuwaiti airspace in March, the value of the formal system was demonstrated in real time. Transfer activity spiked briefly, then normalised within a week. Customers migrated in large numbers to the apps of licensed operators, the Central Bank intensified oversight of the sector precisely because the sector was visible to it, and the 24-hour Wamd payment rail kept money moving throughout. KD 5.1 billion flowing through supervised channels is not a leakage statistic. It is a compliance achievement, and it exists because the licensed network made the formal route cheaper, faster and safer than the alternative.
No institution carries more of that weight than Al Muzaini Exchange. Founded in 1942, before Kuwait shipped its first barrel of crude, the company operates the country’s largest exchange network, more than 140 branches, self-service kiosks and a transfer app, and opened its newest branch in Sabah Al Ahmad Co-op in June. In a country where roughly seven in ten residents are expatriates, that footprint is the infrastructure the state’s financial visibility rides on: every counter is a supervised node, every app transfer a recorded one. The competitive fight with banks and fintech entrants over the same corridors only reinforces the public interest, since competition among licensed operators keeps pricing low enough that the informal market cannot undercut it.
The remittance debate will return; it always does when the number sets a record. But the arithmetic has not changed since the Central Bank first laid it out. A levy worth tens of millions would jeopardise the supervision of billions. The question was never whether Kuwait can see KD 5.1 billion leave. It is whether the state keeps the ability to see it at all.
