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Kuwait to tax expat remittances and companies
| Published: | 18 Nov at 6 PM |
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New reforms due to be presented to the Kuwaiti government are reputed to include taxing expat remittances and foreign companies, privatisation and other austerity measures.
According to local media, the government is fully aware the new measures will attract protests and strong opposition from businesses, expats and others affected by the changes. The reforms will be presented to the emirate’s new government when it convenes later this month.
High on the list will be privatisation of the healthcare and education sectors, with specialised companies to be offered hospital management. The first medical facility to be affected is expected to be Jabar Hospital. As regards education, the reforms will start with one school in each education area, and subsidies will be cancelled for all excepting the poor.
Companies will be forced to pay an extra 10 per cent in tax, and expat money transfers will attract a five per cent tax, according to sources. The new rules are the result of an International Monetary Fund report urging the emirate to trim its budget deficit by enacting new subsidy reforms.
According to the IMF, shrinking oil revenues over Kuwait’s last fiscal year caused a $15 billion deficit and the need for $116 billion of revenue over six years to cope with the shortfall. The IMF’s advice included moving forward with plans to rationalise energy subsidies, increases in non-oil revenue and capping of public sector wages.
Fuel price increases last September caused sparring between Kuwaiti MPs and led to the dissolution of the country’s parliament by the ruler, Emir Sheikh Sabah Al-Ahmad Al-Sabah. Some candidates standing for election to the new parliament are running on an anti-austerity platform, making parliamentary disputes sure to continue.
According to local media, the government is fully aware the new measures will attract protests and strong opposition from businesses, expats and others affected by the changes. The reforms will be presented to the emirate’s new government when it convenes later this month.
High on the list will be privatisation of the healthcare and education sectors, with specialised companies to be offered hospital management. The first medical facility to be affected is expected to be Jabar Hospital. As regards education, the reforms will start with one school in each education area, and subsidies will be cancelled for all excepting the poor.
Companies will be forced to pay an extra 10 per cent in tax, and expat money transfers will attract a five per cent tax, according to sources. The new rules are the result of an International Monetary Fund report urging the emirate to trim its budget deficit by enacting new subsidy reforms.
According to the IMF, shrinking oil revenues over Kuwait’s last fiscal year caused a $15 billion deficit and the need for $116 billion of revenue over six years to cope with the shortfall. The IMF’s advice included moving forward with plans to rationalise energy subsidies, increases in non-oil revenue and capping of public sector wages.
Fuel price increases last September caused sparring between Kuwaiti MPs and led to the dissolution of the country’s parliament by the ruler, Emir Sheikh Sabah Al-Ahmad Al-Sabah. Some candidates standing for election to the new parliament are running on an anti-austerity platform, making parliamentary disputes sure to continue.
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