Kuwait introduces economic reforms: corporate profits taxed, commodities to be 'repriced'

Published March 15th, 2016 - 11:00 GMT
Other measures being undertaken include the privatisation of state-owned assets including airports, ports and some facilities of Kuwait Petroleum Corp. (File photo)
Other measures being undertaken include the privatisation of state-owned assets including airports, ports and some facilities of Kuwait Petroleum Corp. (File photo)

Kuwait's cabinet has approved the introduction of a 10 per cent tax on corporate profits and other economic reforms to lower its forecast $40.7bn budget deficit.

In a news conference yesterday, finance minister Anas al-Saleh did not say when the tax would be imposed, according to Reuters.

To date many foreign firms pay taxes on profits but Kuwaiti firms do not.

In other Gulf Cooperation Council countries hit by low oil prices the focus has been on introducing value added tax rather in 2018 than taxing corporate earnings.

Other measures announced by Saleh included the repricing of some commodities and public services, likely referring to subsidies on fuel, water and electricity.

Kuwait’s government is projected to run a KD 12.2bn deficit ($40.7bn) in the fiscal year starting April 1, nearly 50 per cent higher than for the current fiscal year.

Earlier this week, the governor of the country’s central bank warned that the country might have to change monetary policy if its deficit was not cut.

Other measures being undertaken include the privatisation of state-owned assets including airports, ports and some facilities of Kuwait Petroleum Corp, Saleh said on Monday.

Other economic reforms presented to the cabinet on Monday included allowing projects to be privatized at a rate of 40 per cent and private citizens to own as much as 50 per cent of public-private joint ventures.

Reforms to the labour market and civil service system, including linking public sector pay to production and upgrading the efficiency of general and financial administration were also announced, according to state news agency KUNA .


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