Widespread Opposition Against Kuwait’s Tax System Amid Cash Crisis

Date: 17 April 2021 - 20:48

News ID: ۸۹۲۵۳

KWAIT CITY (MEMO) – Kuwait is set to implement value-added and excise taxes amid popular opposition due to the cash crisis resulting from COVID-19 and the instability of oil prices, report said on Friday.
According to Kuwaiti newspaper Al Qabas, Kuwaiti authorities purchased ITAS software to operate the tax system which the Finance Ministry will be installing.
The paper disclosed that the system is planned to be tested in September, pointing out that the government and the parliament are working on drafting and approving the laws needed for the implementation of these taxes.
In 2018, parliament pushed the Kuwaiti government to postpone the implementation of the tax system to 2021. Excise tax has been imposed on selected products such as tobacco, energy drinks and carbonated drinks.
Kuwait’s minister of finance last month discussed economic reforms which include the gradual cutting of subsidies for citizens within the framework of measures to rescue public finances which have been hard hit by the coronavirus and a global drop in oil prices.
Addressing the cabinet, Barak Ali Al-Sheatan said, under the plans, taxes on services provided to citizens would increase by 50 percent and those for expatriates would rise 150 per cent. Reviews would also be put in place for subsidies provided by the government and taxes would be imposed gradually on corporate profits with a value added tax (VAT) being introduced on selective goods.
The number of citizens eligible for medical treatment abroad would also be cut by 50 percent, he explained.
Kuwait’s budget deficit is expected to reach $55 billion, almost double its projected value at the start of the year.