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Kuwait finance minister says no individual income tax in sight

The Minister of Finance and Minister of State for Economic Affairs and Investment announced plans to activate the Public Debt Law, enabling market borrowing, highlighting strong reserves, a top-five sovereign fund, and a high credit rating, positioning Kuwait for capital markets entry once the law is passed.

• Noura Al-Fassam, Minister of Finance and Minister of State for Economic Affairs and Investment, expressed optimism about Kuwait’s future, citing increased capital spending and declining interest rates to boost projects and development, with plans to re-enter international bond markets following thorough studies and consultations.

• Minister Al-Fassam stated that Kuwait’s tax policy aims for fairness, with business income taxes exempting vital sectors, SMEs, and strategic projects, while developing a comprehensive system aligned with international obligations.

• Kuwait projects 2.6% economic growth in 2025, aligning with the World Bank’s vision. Non-oil revenues target 10%, with aspirations for growth. The fiscal deficit aligns with budget estimates, while financial reforms aim for a resilient, sustainable economy. Tax implementation remains under study.

Noura Al-Fassam, Kuwait’s Minister of Finance and Minister of State for Economic Affairs and Investment, stated there are no plans to impose an income tax on individuals at this time, as reported by Al Anba newspaper.

In an interview with Al-Arabiya Channel during the Davos Economic Forum, Al-Fassam highlighted that Kuwait will activate several financial instruments, including the Public Debt Law, which will enable the country to borrow from the markets.

She emphasized Kuwait’s strong financial reserves, its position as home to one of the world’s five largest sovereign funds, and its high credit rating, all of which position the country to enter capital and borrowing markets once the law is passed, which is expected soon.

In response to a question about Kuwait’s return to the international bond market this year, Al-Fassam said, “Of course, we need to have the opportunity to enter these markets based on expected prices and interest rates. There will be a study and consultations to determine the timing of entry, but we believe that once the law is issued soon, we will have a plan and strategy for entering the markets.”

Minister Al-Fassam stated that Kuwait is currently working on a complete and comprehensive tax system in line with international obligations, particularly the second pillar and mechanisms of cooperation with the Organisation for Economic Co-operation and Development (OECD). This will include a 15% tax on foreign multinational entities with revenues exceeding 750 million euros, which will take effect from January 1, 2025.

“So far, there is no income tax on individuals. There are, of course, obligations with other Gulf countries, and we are still studying when we can apply these taxes. However, this is not for the current period, as we aim to conduct a comprehensive study to understand the progress at this stage and ensure that the tax we apply will be feasible for the state, while also activating other tools progressively.”

She explained that Kuwaiti companies are taxed on Zakat, labor support, and a percentage of net profits to the Kuwait Foundation for the Advancement of Sciences.

Regarding tax justice, she said, “We aim for equality and tax justice, so we will establish an equation to ensure transparency, with tax on the income of companies operating in Kuwait. This law is now being prepared to apply a 15% tax on all companies to ensure tax justice and prevent tax evasion. However, exemptions will be made for vital sectors, small and medium-sized businesses, and strategic projects the state aims to encourage.”

At the start of her speech, Minister Al-Fassam said: “I am pleased to participate in the Davos World Economic Forum, which is being held this year under the theme ‘Cooperation for the Smart Age.’ This slogan comes at a very sensitive time, given geopolitical repercussions and rapid changes in economic matters, such as oil price volatility. It is no secret that there are many challenges due to fluctuating oil prices. We believe that the effects of these fluctuations will take time to fully manifest, and the economic impact on oil-exporting and producing countries will be long-term, not short-term. The fluctuation of prices, along with reduced production levels implemented by OPEC countries, has contributed to the slowdown of the economy, especially the local economy.”

She noted that the domestic economic slowdown was caused by changes in production quotas under the “OPEC+” agreement and falling oil prices. However, she expressed optimism for the near future, particularly as Kuwait is increasing capital spending. Other factors, including inflation control, low interest rates, and a downward trend in interest rates, are expected to stimulate project rates and borrowing by major companies in the country. This could attract more investments to Kuwait and contribute to revitalizing the economy. She expects the country’s economy to grow by 2.6% this year, in line with World Bank expectations. Recovery will depend on the implementation of these plans, driving investments, and diversifying the economy. Al-Fassam added that Kuwait is entering a new phase of income diversification with serious financial and economic reforms and is committed to developing a flexible and sustainable economy in the next phase.

Kuwait is currently in a ‘golden stage’

She stated that fiscal policy targets are being developed to achieve financial balance in the country through the issuance of economic legislation. She noted that Kuwait is currently in a “golden stage,” with legislation that supports the local economy by fostering public-private partnerships, improving the business environment, and attracting foreign investments.

The Kuwait Direct Investment Promotion Authority has made significant progress since its establishment, successfully attracting over $5 billion in foreign investments across various economic sectors. She emphasized Kuwait’s focus on steering more foreign investments into renewable energy, infrastructure, and clean energy projects.

She highlighted tourism as one of Kuwait’s key areas of focus, specifically family tourism from the Gulf region. Kuwait’s success in hosting events such as the “Gulf of Zain 2026” championship has drawn tourists from Gulf countries, boosting the local economy during such occasions.

Additionally, she identified the technology and artificial intelligence sectors as promising fields for investment in collaboration with major international companies. Kuwait has a serious plan to transfer knowledge, establish data centers, and create job opportunities locally. She stressed that investing in human capital is critical for generating opportunities for skilled workers within Kuwait.

Regarding non-oil revenues in the budget, Al-Fassam stated that the current target is approximately 10%, with aspirations to increase this figure, similar to other Gulf countries, to reduce reliance on crude oil sales as the primary source of income.

5.6 billion dinars of expected deficit

In response to a question about the projected budget deficit of 5.6 billion dinars for the current fiscal year, Al-Fassam expressed hope that the final figures would fall within these estimates.

She explained that the government has capped expenses and diversified revenues in line with strategic objectives for the next three years. On whether the final deficit could be lower than estimated, she added cautiously, “We do not believe it will remain at this level, God willing.”

She added that Kuwait is taking serious steps to diversify its economy and attract more investments from both public and private sectors. She emphasized that the Public-Private Partnership Projects Authority will play a key role in launching numerous projects, thereby accelerating the pace of sustainable economic development.

Attracting foreign investments

In a press statement, the Ministry of Finance announced Kuwait’s participation in the annual meeting of the World Economic Forum held in Davos, Switzerland. The Kuwaiti delegation was headed by Minister of Finance and Minister of State for Economic Affairs and Investment, Noura Al-Fassam, representing His Highness Sheikh Ahmed Al-Abdullah, the Prime Minister. The forum witnessed wide participation from world leaders, heads of state, government officials, decision-makers from international financial and economic bodies, and representatives of civil society organizations.

The Ministry of Finance stated that the forum, held from January 20 to 24 under the theme “Cooperation for the Smart Age,” features several dialogue sessions and joint discussions aimed at finding solutions and exploring serious opportunities to address global instability caused by geopolitical conflicts. The forum also focuses on global economic shifts, solutions to mitigate climate change, and topics of international cooperation, including the use of artificial intelligence to benefit the global economy, the impact of technology on economic growth, and cybersecurity.

During her participation, Minister Al-Fassam is expected to discuss a range of critical issues with officials and decision-makers. These include strengthening international partnerships, attracting foreign investments, and analyzing global economic prospects amidst evolving economic challenges. She will also meet with public and private sector leaders from various countries to highlight Kuwait’s efforts to build a diversified and sustainable economy, explore cooperation opportunities, and promote international collaboration.

Notably, Noura Al-Fassam will participate in two dialogue sessions. The first, organized by the World Economic Forum, will focus on long-term economic growth in the Middle East. The second, organized by the General Secretariat of the Gulf Cooperation Council (GCC), will discuss economic diversification, its impact on sustainability, and the role of GCC countries in global economic growth. This session will also feature participation from the GCC Secretary-General and several finance and economy ministers from the GCC member states.

This participation reflects Kuwait’s commitment to enhancing its international presence and supporting sustainable economic development at both regional and global levels.



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