The Kuwaiti cabinet Sunday, June 3 approved a bill to lower taxation on foreign companies operating in the emirate to a maximum of 25 percent of net profits, the finance minister said. "The new bill aims to amend the current law which was introduced in 1955. It falls in line with international economic developments," Yussif al-Ibrahim told AFP.
Under existing law, foreign companies pay up to 55 percent of their net profits as taxes, a factor blamed for the limited foreign investments in the oil-rich emirate. The bill needs approval from parliament and the endorsement of the emir to become law. "I hope parliament will look into this vital bill very soon," Ibrahim said.
But the current term of parliament is scheduled to wind up before the end of June for the summer recess.
The legislation is part of a long list of economic reform bills that Kuwait has introduced in a bid to activate a sagging economy. In August 2000, the Kuwait Stock Exchange was opened to foreigner investors.
And in March parliament passed the first reading of a foreign investment bill which offers incentives, including tax holidays of up to 10 years. The government is also debating with MPs to find a suitable formula to invite world majors to develop oilfields in Kuwait, which sits on top of 10 percent of the world's proven petroleum reserves. — (AFP)
© Agence France Presse
© 2001 Mena Report (www.menareport.com)