On the taxing of migrants’ earnings while retaining a migrant workforce

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URI: http://hdl.handle.net/10900/82775
Dokumentart: Aufsatz
Date: 2018-06-15
Source: University of Tübingen Working Papers in Economics and Finance ; No. 107
Language: English
Faculty: 6 Wirtschafts- und Sozialwissenschaftliche Fakultät
Department: Wirtschaftswissenschaften
DDC Classifikation: 330 - Economics
Keywords: Economics
Other Keywords:
Taxing migrants
Target migrants
Non-target migrants
License: Publishing license excluding print on demand
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We study policies that are aimed at retaining a migrant workforce in a Gulf State while introducing a tax on migrant earnings. We single out Qatar as a case study. We consider two types of migrants: target migrants, and non-target migrants. If migrants are target migrants, we show that in order to neutralize the effect of a tax on their earnings, Qatar needs to extend the length of time migrants are allowed to stay. Such a scheme can work even when the migrants experience utility loss from staying longer in Qatar. If migrants are non-target migrants, we show that implementation of a lottery scheme in which the prizes are life-long residency in Qatar can “compensate” for the imposition of the tax. In both cases, we present numerical examples that illustrate the magnitudes involved.

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