While legislatives and executives are preparing to face economic and financial challenges during the upcoming parliamentary term through measures that have already started such as reducing subsidies and preparing a law on salaries strategic alternative, a proposal made by International Monetary Fund (IMF) to the parliamentary financial affairs committee which suggests imposing revenue taxes on companies has already started taking the lead of parliament’s top priorities.
In this regard, chairman of the parliamentary human resources committee MP Khalil Abdullah, as well as member of the parliamentary financial affairs committee MP Ahmad Al-Qodhaibi warned that attempting to solve budget deficits trough unstudied measures would lead to driving investors, including local ones, out of Kuwait as well as causing prices of goods and services to sky-rocket. “This tax must not be passed without government guarantees to those companies that would help protect national economy,” said Abdullah, noting that imposing taxes call for guarantees that they would not affect prices of goods or services provided by concerned companies.
Meanwhile, Al-Rai daily quoted Qodhaibi who stressed that though the tax would not affect small projects, the government’s approach to diversify its national income resources should be done more comprehensively.
Al-Jarida daily had reported Fricday that after a meeting with the IMF, the parliamentary financial affairs committee discussed the former’s recommendation to impose a 10 percent income tax on companies’ net profit from April 2016. Chairman of the committee MP Faisal Al-Shaya said that the recommendation comes within the Cabinet’s efforts to diversify sources of income.
He added that a full study on the proposal would be submitted to the Cabinet in weeks to discuss its possible impacts on citizens and compare it to similar laws in other GCC states. Shaya said that the proposed tax would bring in additional revenues of KD 500-800 million, which is five to eight times the volume of current tax revenues. “The 10 percent tax will still be less than taxes collected in other GCC states, where they collect 15 percent,” he explained.
Source: Al-Rai, Al-Jarida