India’s proposed new taxation system has stirred worries among its expatriates and experts say labourers could be hit hardest.
The system would affect the lives of millions of Indians who live in the Gulf, experts said. Non-resident Indians (NRIs) would be liable for income tax if they spend more than 60 days a year in India, or 365 days in the preceding four years.
That is a sharp reduction from the current limit of 182 days. Those who are liable for taxes would under the Direct Tax Code Bill 2010 pay at a higher rate. The bill raises the NRI tax liability from the 12.5 per cent rate set by an earlier agreement between the UAE and India to 20 per cent, regardless of income.
The bill is being debated in parliament and will go into effect next year if it passes.
K?V Shamsudheen, the chairman of the Pravasi Bandhu Welfare Trust, which offers free financial advice to low-income workers, said that unlike Indians who lived in India, whose incomes were taxed progressively from 10 to 30 per cent, NRIs were taxed at a flat rate.
“It will most adversely affect low-income workers,” he said. “It is a punishment to them.”
Mr Shamsudheen sent a detailed list of suggestions and problems to the Indian president, Pratibha Patil, during her state visit to the UAE in November. He also voiced concern about harassment from tax authorities, who could at their discretion detain NRIs during their travels over tax returns.
"Thousands of NRIs in the Gulf are low-income Indians who do not have their families staying with them. That makes it necessary for them to spend more time in India to meet family obligations in the event of sickness, children's education, etc," Mr Shamsudheen wrote in his report.
Supporters of the bill say it will clamp down on money laundering and discourage moneyed Indians, especially Bollywood stars, from spending time abroad to avoid taxes.
“I fully agree they must [stop money laundering], but [it should] not penalise the small-income workers,” Mr Shamsudheen said.
“They must find other ways to stop it.”
At the ninth annual Pravasi Bharatiya Divas, India’s convention to connect with its 27-million strong diaspora held in New Delhi earlier this month, prominent members of the Indian community in the UAE appealed for the bill to be amended.
Yusuf Ali, the managing director of the EMKE Group, which runs the Lulu supermarket chain in the Gulf region, proposed regulations to assist low-paid workers.
“Many people take two to three months’ long vacation after working for two to three years. The new law will be a big problem for them,” said Mr Ali, who is also a member of the prime minister’s global advisory council.
He said the more than five million NRIs in the Gulf region were an important source of foreign remittance to India and should be given “fair treatment”.
Ram Buxani, the president of Dubai-based International Traders (ME), which imports and distributes textiles and electronics, also spoke at the gathering and said he discussed the issue with the Indian finance minister, Pranab Mukherjee.
Mr Buxani said he asked the minister to consider adding to the bill a special stipulation for Gulf NRIs.
“The Gulf should be separate,” Mr Buxani said. “Unlike our western counterparts, we do not have social security or other grants. NRIs here have to travel frequently to India to care for their children and relatives, and even their wives, who live away from them.”
He added that Mr Mukherjee assured him those issues would be considered before the bill becomes law.
“You cannot tell it once or twice to them,” said Mr Buxani. “This sort of matter requires constant nagging.”
V?T?V Damodaran, who works for an auditing firm in Abu Dhabi, said most expatriates did not yet understand the intricacies of the proposed tax law.
"People don't yet know to what extent it will affect them," Mr Damodaran said. "They will protest once they find out. They will be dead against it. This is simply bothering the NRIs. We send our remittances, but for that there is no consideration. This is an added headache and obligation for us."
sbhattacharya@thenational.ae
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
On sale: Now
Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
COMPANY PROFILE
Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed
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Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
Company%20Profile
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Wicked
Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
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Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
Citadel: Honey Bunny first episode
Directors: Raj & DK
Stars: Varun Dhawan, Samantha Ruth Prabhu, Kashvi Majmundar, Kay Kay Menon
Rating: 4/5
Citizenship-by-investment programmes
United Kingdom
The UK offers three programmes for residency. The UK Overseas Business Representative Visa lets you open an overseas branch office of your existing company in the country at no extra investment. For the UK Tier 1 Innovator Visa, you are required to invest £50,000 (Dh238,000) into a business. You can also get a UK Tier 1 Investor Visa if you invest £2 million, £5m or £10m (the higher the investment, the sooner you obtain your permanent residency).
All UK residency visas get approved in 90 to 120 days and are valid for 3 years. After 3 years, the applicant can apply for extension of another 2 years. Once they have lived in the UK for a minimum of 6 months every year, they are eligible to apply for permanent residency (called Indefinite Leave to Remain). After one year of ILR, the applicant can apply for UK passport.
The Caribbean
Depending on the country, the investment amount starts from $100,000 (Dh367,250) and can go up to $400,000 in real estate. From the date of purchase, it will take between four to five months to receive a passport.
Portugal
The investment amount ranges from €350,000 to €500,000 (Dh1.5m to Dh2.16m) in real estate. From the date of purchase, it will take a maximum of six months to receive a Golden Visa. Applicants can apply for permanent residency after five years and Portuguese citizenship after six years.
“Among European countries with residency programmes, Portugal has been the most popular because it offers the most cost-effective programme to eventually acquire citizenship of the European Union without ever residing in Portugal,” states Veronica Cotdemiey of Citizenship Invest.
Greece
The real estate investment threshold to acquire residency for Greece is €250,000, making it the cheapest real estate residency visa scheme in Europe. You can apply for residency in four months and citizenship after seven years.
Spain
The real estate investment threshold to acquire residency for Spain is €500,000. You can apply for permanent residency after five years and citizenship after 10 years. It is not necessary to live in Spain to retain and renew the residency visa permit.
Cyprus
Cyprus offers the quickest route to citizenship of a European country in only six months. An investment of €2m in real estate is required, making it the highest priced programme in Europe.
Malta
The Malta citizenship by investment programme is lengthy and investors are required to contribute sums as donations to the Maltese government. The applicant must either contribute at least €650,000 to the National Development & Social Fund. Spouses and children are required to contribute €25,000; unmarried children between 18 and 25 and dependent parents must contribute €50,000 each.
The second step is to make an investment in property of at least €350,000 or enter a property rental contract for at least €16,000 per annum for five years. The third step is to invest at least €150,000 in bonds or shares approved by the Maltese government to be kept for at least five years.
Candidates must commit to a minimum physical presence in Malta before citizenship is granted. While you get residency in two months, you can apply for citizenship after a year.
Egypt
A one-year residency permit can be bought if you purchase property in Egypt worth $100,000. A three-year residency is available for those who invest $200,000 in property, and five years for those who purchase property worth $400,000.
Source: Citizenship Invest and Aqua Properties
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
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COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
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