Kuwait takes stronger stance on long-overdue government debts

• Recognizing that taxes are a primary source of government revenue, the Ministry of Finance was advised to implement the rules and executive instructions concerning the collection and payment of labor support taxes and zakat

• The recommendations included advising the Ministry of Finance to adhere to its circular on the rules and procedures for applying government electronic stamps.

• The relevant authorities were advised to work on collecting taxes that must be refunded and to establish clear procedures for their regular collection.

In line with the government’s strategy to manage public spending and streamline payments, Al Rai newspaper has learned from informed sources that there is an increased oversight of government agencies. This move aims to bolster financial planning and budget preparation through a series of targeted procedures and recommendations.

The sources pointed out that the supervisory recommendations issued in this regard are varied and involve multiple parties, as they are heavily relied upon to achieve financial discipline and enhance the efficiency of public finance management.

In addition, the sources revealed that the recommendations issued in this regard include the following:

1. 1.  The Civil Service Bureau must adhere to budget rules, particularly those prohibiting the disbursement of amounts on behalf of other government agencies unless the amounts are collected from those agencies and recorded in the current liabilities account as “amounts under settlement.”
      The directives also emphasize the need to take all necessary measures to collect debts owed to government agencies promptly, with rigorous follow-up and adherence to financial regulations. These recommendations are part of broader efforts to manage debt collection for the government, especially for long-standing debts that remain unpaid despite their accumulation over the years.
      The sources indicated that the supervisory recommendation aligns with the general government objectives by emphasizing that all affiliated entities should collect their outstanding debts and take all possible legal measures against entities that are delinquent in payment. This move aims to enhance the effectiveness of financial performance and achieve financial discipline.
   2. In a related context, the relevant authorities were advised to work on collecting taxes that must be refunded and to establish clear procedures for their regular collection.
   3. Government agencies are directed to complete the development plan projects included in the approved budget for each ministry to achieve the state’s development objectives. They are also instructed not to use the appropriation for other obligations, aligning with plans to control public expenditures and ensuring that spending follows the specified budgetary path.
   4. Recognizing that taxes are a primary source of government revenue, the Ministry of Finance was advised to implement the rules and executive instructions concerning the collection and payment of labor support taxes and zakat. This is in compliance with Law No. (19) of 2000 regarding the support of national labor and its employment in non-governmental entities, and Law No. (46) of 2006 regarding zakat and contributions by public and closed joint-stock companies.
   5.  To strengthen the general income system, the Ministry of Finance was advised to adhere to the Income Tax Decree and its amendments and to collect all due taxes. From an accounting perspective, overdue and uncollected taxes are considered debts to the government, which necessitates accelerating the procedures for payment into the general budget as soon as possible and taking the necessary legal measures to collect them.
   6. The recommendations in this area also included advising the Ministry of Finance to follow the ministry’s circular regarding the rules and procedures for applying government electronic stamps.
      The sources also pointed out that controlling the budget not only allows for comparing achievements with the expectations set in the budget but also for identifying shortcomings and deficiencies in the government’s financial performance.
   7. Government recommendations include directing affiliated agencies to enhance performance and address deficiencies. Each agency is tasked with submitting periodic reports on their efforts and procedures to address observations and implement recommendations from oversight and follow-up reports concerning their performance and required actions.

The sources revealed that the authorities responsible for monitoring and following up on government performance are scheduled to present a visual report to the Council of Ministers every three months. This report will detail the efforts and procedures undertaken by government agencies to address observations and implement recommendations from the Government Performance Follow-up Agency. It will also include a list of entities that are not cooperating or failing to submit the required reports within the specified timeframe.