Kuwait expects to raise between KD800 million and KD1 billion ($2.6-3.3 billion) every year when a new corporation tax is launched, according to a senior official at the country’s Ministry of Finance.
Finance Undersecretary Khalifa Hamadah said the draft tax law is expected from the International Monetary Fund (IMF) in December 2016, and that the ministry would take between three and four months to review the legislation, according to remarks published by state news agency KUNA.
Kuwait said in April it was studying proposals to introduce the same levy for domestic firms, which generally pay little or no tax on income, and foreign companies, whose commercial activities are taxed with a rate of 55 per cent in the highest bracket.
Hamadah also said that no decision had yet been taken to issue sovereign debt as Kuwait bids to tackle an estimated 20 percent budget deficit this year.
However, the official stated that two large government bodies, the Public Institution for Social Security and Kuwait Petroleum Corporation (KPC), were considering issuing “annual bonds at a value of KD3-4 billion [$10-13.2 billion]”.
The minister also reiterated that Kuwait is not considering enforcing an income tax on individuals in the country.
Hamadah said that the ministry had hired accountancy giant EY to prepare a study about the “rationalisation” of subsidies, which would be completed before November. Kuwait had outlined a plan to pare back fuel and power subsidies last year, but this was shelved in January.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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