Ernst & Young’s partner, Alec Schoch, said at least 42,000 expatriate professionals will enter Kuwait to apply value added and selective taxes, reports Al-Rai daily.
In an exclusive statement to the daily, Schoch said tax professionals should be available in the local market to help 30 percent of companies comply with the taxes the State intends to apply.
He pointed out that the government’s preparations for the implementation of the tax is continuing, while its enforcement remains subject to its approval by the National Assembly, pointing at the same time that “the application of taxes to correct the imbalance in the budget, and diversify sources of revenue is a practical option and better than to lift subsidies on fuel, electricity and water for the comprehensiveness of the application of the tax on both the citizen and the resident, as well as for the combination of tax and consumption behavior of citizens and residents.”
He said that the optimal application of the tax will require linking financiers and bank accounts directly with the Ministry of Finance, in the sense that the tax authority in the Finance Ministry must ask permission to enter the banking information for taxpayers supplying tax to the ministry for tax compliance settings, not to mention access to the assigned information in Ministry of Commerce and Industry. He noted that Kuwait has deferred the application of ‘value added tax’ (VAT) until 2021 which means waste of revenue of about 1.9 billion dinars for the general budget, while the lost revenues rise on the State in case of delayed selective tax to 2.5 billion dinars ($8.4 billion) as the ‘selectivity’ alone lost revenues of 600 million dinars. Schoch predicted that Kuwait would eventually recognize the VAT and ‘selective’ taxes, especially since it signed the GCC agreement and is committed to it, which makes the possibility of implementing the tax in Kuwait somewhat high, pointing out that the law is with the Parliament means that the government’s preparations for the implementation of the tax continue, and that its enforcement is subject to approval by the National Assembly.
© 2022 Arab Times Kuwait English Daily. All Rights Reserved.