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High-earners may lose ration card privilege
November 29, 2015, 9:54 am
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In the process of streamlining expenditures to cover about KD 7 billion budget deficits, the Council of Ministers in a matter of days will begin to approve some economic procedures to support revenues. The procedures will include cutting down the rate of subsidies on oil products, electricity, water, and ration food, as these items creates about KD 5 billion in excess burdens on the budget annually.

Although, some ministers assure that taxes, reduction in expenditure, and increase in fees will not affect individuals or low income earners, a source said the government has urged Ernst & Young Company to study the formula of ration subsidy and the implications of its removal. He said the company has been given until early 2016 to submit its report, and not the end of February as previously decided.

He declared that government has been considering the possibility of canceling the ration cards of citizens whose salaries are above KD 1,300. He revealed that the value of ration subsidy in the current budget is over KD 280 million.

This is contrary to an impression given by the Minister of Commerce and Industry Dr. Yousef Al-Ali who affirmed that the ministry was yet to take such a decision but could not confirm whether or not it was an appropriate recommendation from other authorities.

He indicated the financial reform includes reduction in the state expenditure. He also said the prices of oil products as well as tariffs for electricity and water consumption will be increased for the owners of real estates, shopping malls, chalets and farms. He added that government will reduce budgets of diplomatic missions, health, and investment bureaus abroad.

Confirming the intention, the Minister of Social Affairs and Labor and State Minister for Planning and Development Affairs Hind Al-Sabeeh reiterated the need to take decisions recommended in some studies in the past to ensure that the state budget is sustained. She declared that 93 percent dependent on oil as the sole source of revenue and the current decline in its prices calls for such a drastic decision.

In a press release, the Secretariat-General for Planning pointed out that the sector will form synergy with the ministries and National Assembly to take positive steps toward presenting some recommendations to resolve the problems associated with huge salaries and subsidies appropriately.

The statement disclosed that the cost of subsidies for the last fiscal year estimated at KD 5 billion covered a quarter of the revenues in the state budget. It concluded some subsidies amount to waste of public funds, especially power consumption. “Therefore, a reasonable measure must be taken to deal with the situation”. It also urged for privatization of services that do not require legislation.

Source:  Al-Seyassah

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