Kuwait Will Not Abandon Economic Reforms Despite Higher Oil Prices

Published October 31st, 2018 - 09:11 GMT
The Gulf's six oil-exporting countries originally agreed to introduce a five per cent value-added-tax (VAT) at the start of 2018. (Shutterstock)
The Gulf's six oil-exporting countries originally agreed to introduce a five per cent value-added-tax (VAT) at the start of 2018. (Shutterstock)

The Emir of Kuwait has urged the parliament to work with the Government to implement measures aimed at diversifying revenues and developing the economy, stressing the need to push through economic reforms despite higher oil prices.

The Gulf state, whose state finances are among the strongest in the region, has been trying to introduce new taxes and reform a lavish welfare system to curb state spending.

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The Gulf's six oil-exporting countries originally agreed to introduce a five per cent value-added-tax (VAT) at the start of 2018. Saudi Arabia and the UAE introduce VAT early this year, the other states have delayed because of political opposition, potential damage to consumer spending as well as the technical challenges of a new tax.

Sheikh Sabah Al-Ahmed Al-Jaber al-Sabah, the Emir of Kuwait, said, “I hope that the recent temporary improvement in oil prices does not obstruct this important path, which aims to protect future generations.”

In May, the Parliament's budget committee said that Kuwait would not implement VAT before 2021, but would push ahead this year with excise taxes on selected products, such as tobacco and sugary drinks, reported Reuters.


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