Gulf Expats Will Have To Pay For Perks

Financial Planning


Expats in some Gulf States are to lose some expensive perks as governments look to cut costs as the price of oil stagnates.

Lawmakers in Bahrain are in discussions about scrapping electricity and water subsidies and stopping at least some free education for expat children.

Meanwhile, in Kuwait, all visa fees are set to rise and expats face a ban on free healthcare.

In Bahrain, government officials say they are putting the finishing touches to a plan that see new charges imposed on utility bills for expats.

“The actual rates have not yet been decided, but the rest of the work is complete and an announcement will follow about the changes within a few days,” said a government spokesman.

“The main focus is making companies pay a fair rate for the water and electricity that they use – and cutting off those that don’t.”

Utilities, schooling, health care and visas cost more

The utility subsidy will follow the same system as meat subsidies for Bahraini nationals, explained the spokesman.

“We will either pay a subsidy directly into a bank account or supply a ration card,” he said.

The government also intends to charge expats school fees.

Each child costs the government $7,900 a year to put through schooling, and the intention is to transfer that charge to parents.

In Kuwait, visa costs are set to rise for expats – including temporary residency, self-sponsorship and family dependency visas. Visa renewals will also be linked to those of an expat’s sponsor from January 2016.

The government has warned that no services will be supplied free to expats, including health care and education and that expats will be charges the full cost of providing the service.

Stealth taxes for expats

Expat private health insurance costs are expected to triple to at least $500.

The government wants to introduce a two-tier service where public sector workers are treated in private hospitals and private sector workers will only have access to expat-only hospitals.

Countries across the Gulf States are introducing stealth taxes on expats through visa charges, health insurance and school fees as they attempt to shore up budget deficits caused by the plunging price of oil.

Oil has collapsed from more than $100 a barrel a year ago to around $50 a barrel now.

The effect of the price drop has meant leaders have had to rethink public spending plans.