Legislation currently being prepared by the Kuwaiti cabinet will, according to newspaper reports, revolutionize the country’s tax code, and for the first time subject local businesses to company taxes. At present, only foreign companies pay taxes in Kuwait.
Speaking to the Al Anba daily, Fawzi Al-Kassar, an assistant undersecretary at the Kuwaiti finance ministry said that the proposed law will impose taxes on companies, small businesses and all commercial transactions. The bill does not yet impose income taxes, but that eventuality cannot be ruled out, he stated. Al-Kassar noted that, currently, tax collection accounts for less than one percent of state revenue.
Before it can be implemented, the new tax bill will have to be approved by the 50-seat Parliament, and its passage may not be a foregone conclusion. Members of parliament have called on the government first to put its own house in order—reducing both spending and the level of corruption—before forcing the country’s citizens to pay up.
Kuwait’s existing tax law is 45 years old, and the way it is balanced in favor of local businesses is believed by many to be the main factor inhibiting foreign investors from entering the country.
Kuwait’s citizens have to know that in almost all developed countries people pay taxes, Al-Kassar stated. — (Albawaba-MEBG)
