India begins levying service tax on remittance fee from abroad

India has started levying a service tax on “fees or commission” charged by banks and financial institutions for facilitating remittances from abroad.

This may slightly increase the cost of remittance to India, which will mainly affect the majority of low-income Indian expatriates in the UAE and other Gulf countries who remit money every month to their dependants back home.

However, it will not pose a big burden on expatriates as the tax is imposed only on the “fee or commission charged by banks for facilitating remittances” and not on the actual remittance.

The remittance fee from the UAE to India costs up to Dh20. A part of this amount is paid to the agents in India, which will attract the new service tax. As Gulf News reported on October 16, a circular issued by India’s Central Board of Excise and Customs (CBEC) on October 14 imposed a 12.36 per cent service tax on the “fee or commission” charged for facilitating remittances from abroad. But it was not clear whether the government would start levying it with immediate effect.

The agents in India who facilitate remittances from abroad have recently received notice from the Indian tax authorities to pay the service tax, effective October 15, a senior executive of the remittance service industry told on Tuesday.

“Although the fee or commission charged by agents in India [banks and other financial institutions in India] varies, it may be between Dh5 and Dh10 for remittances from the UAE,” said Y. Sudhir Kumar Shetty, vice chairman of Foreign Exchange and Remittance Group (FERG), an official platform of the companies engaged in the business of money exchange and remittances in the UAE.

Considering the fact that Dh10 is the maximum fee paid to agents in India, the 12.36 per cent tax may go up to Dh1.24 (Rs20.9), Shetty, who is also the COO of UAE Exchange, said.

Although it is a small amount for a single transaction, an agent doing thousands of transactions has to pay a huge amount as tax which may be passed on to the customers, he said.

A prominent financial consultant in India said although the tax is a small amount, it is unjustified as Non Resident Indians (NRIs) deserve incentives for bringing foreign exchange into India.

UAE Ministry of Labour will stop granting work permits to establishments not complying with judicial rulings

Saqr Ghobash, Minister of Labour, recently stated the Ministry of Labour will stop granting work permits to abstaining establishments if found not complying with final judicial rulings.

He pointed out that owners will be granted 30 days ultimatum to resolve court issues to avoid work permits blockage on their other facilities as well.
The suspension decision encompasses various types of work permits including labour recruitment, work permits and work transfers, family visa and temporary work permits and work permits for minors.

Humaid bin Dimas, Assistant Under-Secretary of the Ministry’s Labour Affairs, said, "The ministry has almost completed the data inventory of all abstaining facilities, in collaboration with the departments to ensure the smooth implementation of the resolution and achieve its desired goals."

"The suspension of work permits to abstaining establishments that refrain from implementing the final judicial judgments with regards to the labour issues, comes within the framework of country’s policies that are aimed at strengthening laws and respecting the verdicts issued by the judiciary system."

Bin Dimas noted, "The suspension decision supports the ministry's strategic plan to protect labour rights, and provide all forms of protection for workers, while ensuring the interests of employers are met in accordance with the national legislations, and in conformity with the international conventions and standards."

He pointed out that the decision, which was issued by the Labour Minister, constitutes one of the tools used by the ministry to enforce the adherence to the legislation, adding that the role of the ministry in labour disputes does not stop by just referring complaints not be resolved amicably between both sides to the court, but also contribute to the implementation of the verdicts.

It suspends the work permits for non-compliant establishments through cooperation with the courts.

"The Ministry of Labour’s policy in granting any facility a work permit for foreign manpower is based mainly on the extent of the employer’s commitment to labour laws by providing labour rights protection, providing basic living requirements and foremost pay them on time," bin Dimas said.

He also mentioned that the ministry will lift the suspension on the facilities after obtaining a request by the judge, stating that they have implemented the court verdict

First phase of compulsory health insurance cover in Dubai effective from October 31 2014

The Dubai Health Authority’s (DHA) first phase of compulsory health insurance cover effective October 31 will involve approximately 300 companies who employ 1,000 or more employees.

The first of four phases is expected to cover up to 700,000 employees, said authorities on Tuesday,

Non-compliance with the law will result in fines and penalties that will be levied on the erring companies who fail to pay the full cost of basic health insurance for each employee.

DHA Director-General Eisa Al Maidour said on Tuesday that the first phase of the roll-out will have far-reaching effects for workers who will now have basic health care.

“This is a major milestone in ensuring access to health care. This phase of implementation applies to approximately 700,000 employees in Dubai. By mid-2016, everyone in Dubai will have mandatory access to health insurance. So far, we are pleased with the results of the roll out and are thankful to all those employers who have supported us by adhering to the deadline. However, there are still some employers who have not yet met the deadline and we urge them to act promptly.”

The DHA director for Health Funding Dr Haidar Al Yousuf noted that the “legal requirement is for providing the basic insurance package that falls between Dh600-Dh700 annually. However, there are companies that are providing more than the basic package and also providing insurance cover for dependants. It’s a mixed bag,” he said.

Right now, the focus is the insurance cover for the employees. Having insurance cover for the dependants will be covered in Phase 3 of the implementation which falls in 2016. But the responsibility of providing insurance cover for dependants falls on the employee. DHA is working with insurance companies to provide reasonable cover for dependants, according to Dr Yousuf.

Providing information on how the law would be implemented, Al Maidour said that soon the DHA will use direct electronic links with relevant government stakeholders to enforce the law. “Health insurance will be linked to the residency visa in collaboration with the relevant authorities including free zones.”

In other words, no visas will be renewed without a valid insurance cover once the law comes into effect.

Short-term UAE visit visa via smartphone

The Ministry of Interior (MoI) has launched three new procedural services via smartphones, which include issuance of short-term visit visas (for 30 days), renewal of citizens’ passports, and issuance of Certificates of Good Conduct (Criminal Status Certificates).

The new services are launched under the slogan 'One Application... Multiple Services' and embody the UAE Smart Government initiative.

Major-General Dr Ahmed Nasser Al Raisi, Head of the e-Services and Smart Applications Team at the MoI, explained that the new short-term visa issuance service saves time for citizens and residents alike, and enables individuals to apply for a 30-day visa through their smartphones, without the hassle of visiting the General Directorate of Residency and Foreign Affairs at the Naturalisation Residency and Port Sector.

Once the visa is issued, it will be delivered to the applicants via accredited entities designated by the MoI.

He also noted that the Civil Defense informatics services provide individuals and institutions with the necessary information about compliance certificates, as well as executive approvals for architectural, gas, and decoration.

More new services

Maj-Gen Dr Al Raisi announced that the MoI is planning to launch a new bundle of services for Traffic, Naturalisation, Residency, and Civil Defense sectors; as well as other services in the upcoming period via the UAE - MoI smartphones apps.

“The MoI has already initiated the necessary executive procedures to expand these services and make them accessible to all citizens and residents,” he said.

Maj-Gen Dr Al Raisi said, “A Smart Application Centre was established at the Ministry of Interior. It is operated by a highly qualified team of Emirati citizens, to handle all electronic procedures pertaining to these services, and respond to customers’ inquiries via the call center on 8005000.”

He also noted that to date 205,000 individuals are using the applications that the MoI has launched early this year, with an average 54,000 uses per day. While the number of subscribers via the Emirates ID card amounts to 62,000 users.

MoI platform supports Apple, Android, BlackBerry and Windows compatible smartphones.

It provides an electronic link with a number of partners in the UAE, car inspection and insurance companies; as well as an integrated comprehensive link to the ministry’s website, through the unified login mechanism (username and password) to obtain services from any channel of electronic communication.

Users can register once using the single sign-in feature on the website or through smartphones, and gain access to all of the MoI’s services.

20 second immigration clearence at all UAE airports within few months

 The smart gates now available at Dubai International Airport and Abu Dhabi Airport provide residents as well as visitors easy passing through the immigration formalities in 20 seconds approximately.

Registration for the e-Gate is required and it will save the details of the traveller in the system. Currently, registration in Dubai only provides access at Dubai’s airport, and registration in Abu Dhabi only to the airport in the capital.

This is soon to change, explained Saif Al Mazrouei of the General Directorate of Residency and Foreigners Affairs (GDRFA) at Gitex Technology Week.

“All e-Gates will be unified and all airports will work together, so an e-Gate user will only be required to register once.”

Currently e-Gate registration is available free-of-charge at the airports where the technology is available, at GDRFA service centers and at Dnata offices. The applicant needs to be able to present a valid passport and residency visa.

Once registered, the long queues at the immigration desk of the airport can be skipped, and the traveller can head directly to the e-Gate. Here, he will first be asked to present the passport, after which a first gate opens.

An eye scan will verify whether the person is indeed the same as the passport holder, and the passport validity will be checked. When both verifications are successful, the second gate will open and the process will be complete.

The current system is an updated version of the older e-Gate system, which required passengers to present an e-Gate card that had to be purchased.

Although the old e-Gate system was available at all airports, the new technology was only recently introduced as a trial basis, and will be expanded to all airports before the year-end.

Within the next couple of months, the latest e-Gate technology will become available at all airports in the country. Once a person has registered as an e-Gate user, this will provide access to e-Gates of all airports in the UAE.