Kuwait expects to table a bill to harmonise corporate tax rates between local and foreign firms in around two years’ time, offering incentives to key sectors like telecoms and IT, the country’s finance minister said on Monday.
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 percent in the highest bracket. “We are looking at many, many scenarios … but we are definitely looking at matching them,” Finance Minister Anas al-Saleh told Reuters on the sidelines of a conference in London. “We need to draft legislation … in 24 months we should have a law that can go to parliament.”
Saleh expected the rate for international firms to fall and the levy on local companies to rise, though he declined to indicate a level. He added the government was also looking at introducing tax breaks for companies operating in key sectors like IT, telecommunications and petrochemicals. “There will also (be) incentives, incentives to encourage corporates to focus on certain sectors that are needed for our economy,” he said.
Introducing a new corporate tax will be politically sensitive in Kuwait, which has seen pressure on its state finances because of the plunge in oil prices. Officials say they want to diversify revenue sources beyond oil. Saleh reiterated there were no plans to introduce income tax for individuals.