Kuwait to postpone VAT implementation

Agencies
Wednesday, May 16, 2018

Kuwait will not implement value-added tax (VAT) before 2021 but will push ahead with introducing excise tax, parliament’s budget committee said in a statement posted on the assembly’s website on Tuesday.
“The committee said implementation of value-added tax in Kuwait will be postponed until 2021, and that the finance ministry saw the need to expedite measures for excise tax on select products such as tobacco, energy drinks and carbonated drinks,” it said without elaborating.

Their state finances strained by low oil prices, the six wealthy Gulf Arab oil-exporting countries originally agreed to introduce VAT at a 5 per cent rate at the start of this year, and Saudi Arabia and the United Arab Emirates did so.

But the other four countries delayed because of domestic political opposition, the potential negative impact on consumer spending, and the technical challenges involved in a new tax. None of the four have announced an official date for VAT to be imposed.

Kuwait has the most powerful parliament in the region, so the budget committee’s desire to delay VAT looks likely to stick, although cabinet officials have called for faster tax and spending reforms.
Revenues from the new tax could be substantial; the International Monetary Fund (IMF) has estimated VAT in the UAE will eventually rake in 1.5 per cent of gross domestic product.

But Kuwait’s state finances are among the strongest in the region and oil prices have surged in the last several months, so the Kuwaiti government has little immediate need for fresh revenues.

Gulf governments also agreed jointly to introduce an excise tax on tobacco and sugary drinks, which will raise much less money than VAT. Kuwait’s finance minister said on Monday that he expected parliament to approve the excise tax during its next session, which begins in October.

Express your comment on this article

 
Erny
Tuesday, May 15, 2018
Thank God... that''s a big relief to everybody, both citizens and expats.

Submit your comments...
     
Disclaimer: The views expressed here are strictly personal and IndiansinKuwait.com does not hold any responsibility on them. We shall endeavour to upload/publish as many of the comments that are submitted as possible within a reasonable span of time, but we do not guarantee that all comments that are submitted will be uploaded/published. Messages that harass, abuse or threaten other members; have obscene, unlawful, defamatory, libellous, hateful, or otherwise objectionable content; or have spam, commercial or advertising content or links are liable to be removed by the editors. We also reserve the right to edit the comments that do get published. Please do not post any private information unless you want it to be available publicly.

Community News
 

IndiansinKuwait.com presents a Free Seminar on "Dream Merchant" on Thursday, 17th January 2018. This life changing seminar w...

Kuwait Odisha Association -(KOA), organized a Beach Cleanup Drive on 4th January 2019 at Mahboula Beach. Around 100 member...

The Kuwait Wayanad Association (KWA) organized a winter camp at Wafra Farm House as "Vayalnadin Sangam 2019". Started on ...

Advaitham Kuwait Office bearers for the year 2019-20 have been elected unanimously in the 5th Annual General Body meeting he...

Indiansinkuwait.com presents a Free Art Workshop with the theme "Learn to paint your Imagination" On January 18th Friday fro...