A proposal is under study to reintroduce the law to deduct 10 percent of the revenues generated annually in the general budget for the benefit of the Future Generations Fund.
Informed sources told a local Arabic daily that “the reactivation of the deduction reflects the improvement of Kuwait’s financial situation and its progress towards achieving financial surpluses in light of the rise in oil prices to good levels compared to the period of stopping the deduction during which the country faced a shortage of liquidity.”
The sources stated that “the government’s vision proposes the return of the deduction at the end of the fiscal 2022/2023, provided that work will start from the next fiscal 2023/2024, provided that surpluses are achieved while the climate of oil prices remains high and secure.”
The sources confirmed that “the price of a barrel of oil above $ 80 will pave the way for achieving abundant reserves during the coming period, and thus compensating the deficit and covering obligations more, and moving towards launching various development projects, after the repercussions of the Corona pandemic caused pressure on liquidity in light of the decline in revenues and business halt.”
The sources pointed out that the Ministry of Finance was able to meet the ongoing commitments according to timetables, which include what concerns state ministries in addition to permanent needs, noting that these amounts include commitments to projects that have already been completed by various companies and institutions, in addition to entitlements belonging to government agencies.
It is expected that Kuwait will be able to record huge financial surpluses during the current fiscal year, especially that the price of a barrel of Kuwaiti oil is currently more than $100, compared to the estimated price of $80 per barrel and the estimated break-even price of $79 in the 2022/2023 budget, which will reflect positively on the country’s financial situation.