Most com­pa­nies in GCC states not com­pletely ‘VAT pre­pared’

‘Kuwait with­draws KD 28.575 bln from na­tional re­serve’

Arab Times - - LOCAL -

Most of the com­pa­nies in GCC mem­ber states are not com­pletely pre­pared for im­ple­ment­ing Val­ueAdded Tax (VAT) sys­tem, re­ports Al-Sha­hed daily.

Ac­cord­ing to a new sur­vey con­ducted by the As­so­ci­a­tion of Char­tered Cer­ti­fied Ac­coun­tants (ACCA), UK in co­op­er­a­tion with Thom­son Reuters, there is mas­sive ab­sence of pre­pared­ness and aware­ness among com­pa­nies in Kuwait and the re­gion on the ef­fect of VAT on them. Only six months re­main for the GCC states to im­ple­ment the tax sys­tem, which is ex­pected to come into ef­fect by early 2018.

The sur­vey in­di­cated that only 11 per­cent of the par­tic­i­pants are aware of the ef­fects of im­ple­ment­ing VAT on their oper­a­tions while 49 per­cent are in the process of eval­u­at­ing the ef­fects of VAT.

Mean­while, Deputy Prime Min­is­ter and Min­is­ter of Finance Anas Al-Saleh dis­closed that the coun­try has with­drawn KD 28.575 bil­lion from the na­tional re­serve in three years, stress­ing that the fu­ture­gen­er­a­tions-re­serve law does not al­low with­drawal due to which the with­drawals were made from the public re­serve, re­ports Al-Qabas daily.

In re­sponse to a par­lia­men­tary ques­tion raised by MP Osama Al-Sha­heen, Min­is­ter Al-Saleh re­vealed that the coun­try is­sued bonds worth $8 bil­lion (equiv­a­lent of KD 444 mil­lion) on March 20 in the in­ter­na­tional mar­ket, in­di­cat­ing that Kuwait never is­sued any in­ter­na­tional bond in the past.

Re­gard­ing the con­cept for value of the new lend­ing, he ex­plained that the strat­egy for lend­ing in the cur­rent year is still be­ing pre­pared. On that ba­sis, the es­ti­mated value of the rate of lend­ing for years cov­er­ing 2017-2020 would be fixed.

He af­firmed that Kuwait’s bond is the best in the Ara­bian Gulf re­gion, con­sid­er­ing the ref­er­ences from in­ter­na­tional banks and fi­nan­cial in­sti­tu­tions, adding that the fac­tors con­sid­ered for the rat­ing in­clude the level of sub­scrip­tion and low cost of lend­ing.

In­dus­try

In an­other re­port, Min­istry of Com­merce and In­dus­try has re­ferred a pro­posal for the amend­ment of the laws gov­ern­ing the Au­thor­ity for Pro­tec­tion of Com­pe­ti­tion af­fil­i­ated to Fatwa and Leg­is­la­tion Depart­ment as a pre­lim­i­nary step to re­fer­ring the pro­posal to the par­lia­ment in the up­com­ing par­lia­men­tary term, re­ports Al­jarida daily quot­ing min­is­te­rial sources.

They in­di­cated that the cur­rent amend­ments were based on co­or­di­na­tion with the World Bank in the frame­work of its on­go­ing co­op­er­a­tion with Kuwait to de­velop the lo­cal laws.

The sources ex­plained that the pro­posal con­sists of amend­ments to sev­eral ar­ti­cles of the cur­rent law and re­moval of some new ones in­clud­ing in­creased in­de­pen­dence of the au­thor­ity and al­lo­ca­tion of in­de­pen­dent bud­get for the au­thor­ity.

The gov­ern­ment was pre­vi­ously op­posed to these two amend­ments and pre­ferred the ad­min­is­tra­tion and fi­nan­cial struc­ture to con­tinue be­ing un­der the au­thor­ity without any changes, un­like other au­thor­i­ties such as the telecom­mu­ni­ca­tion au­thor­ity.

The amend­ments also in­clude giv­ing the au­thor­ity the abil­ity to im­pose penal­ties and sanc­tions as deemed suit­able based on the type of vi­o­la­tion and the level of dam­ages that could re­sult from prac­tices that neg­a­tively im­pact com­pe­ti­tion as well as monopoly.

This will en­sure “cre­ation of a com­pet­i­tive eco­nomic en­vi­ron­ment based on the econ­omy’s com­pe­tency through im­ple­men­ta­tion of all as­pects of the com­pe­ti­tion pro­tec­tion law in a man­ner

that will achieve equal op­por­tu­ni­ties among var­i­ous sec­tors and fair econ­omy units in the lo­cal mar­ket. This will in turn ben­e­fit the na­tional econ­omy and the con­sumers due to ex­is­tence of pro­duce and its di­ver­si­fi­ca­tion amid bet­ter qual­ity and rea­son­able prices”.

The sources in­di­cated that the amend­ments in­clude re­def­i­ni­tion of “con­trol”, as it will de­ter­mine and elab­o­rate all cases for which there could be an ac­tual “con­trol­ling” fac­tor in a cer­tain econ­omy sec­tor in the coun­try fol­lowed by pres­ence of a suit­able mech­a­nism to deal with these cases and im­pose suit­able di­rec­tives.

They said Min­istry of Com­merce and In­dus­try, through the new amend­ments, is striv­ing to align the work of the au­thor­ity with that of the Cap­i­tal Mar­ket Au­thor­ity, which

en­joys high-level of in­de­pen­dence in its work and ex­ten­sive au­thor­i­ties in im­pos­ing penal­ties and sanc­tions, de­vel­op­ing the mar­ket and in­creas­ing its abil­ity to at­tract for­eign in­vestors.

The min­istry con­sid­ers these amend­ments as “one of the main pil­lars on which the free-mar­ket econ­omy stands in line with free­dom of com­pe­ti­tion among var­i­ous econ­omy units in a man­ner that as­sures oper­a­tions in ac­cor­dance with proper and fair mech­a­nism and prin­ci­ples within the mar­ket”.

The sources ex­plained that the Au­thor­ity for Pro­tec­tion of Com­pe­ti­tion re­views com­pet­i­tive ac­tiv­i­ties and ap­proves or de­nies them. This is be­cause it pro­tects free trade and pre­vents monopoly ac­tiv­i­ties in a man­ner that will cre­ate mar­ket sta­bil­ity and en­cour­age in­ter­na­tional

com­pa­nies with its fi­nan­cial abil­i­ties and high-level tech­no­log­i­cal skills in terms of en­ter­ing the lo­cal mar­ket.

Other tasks of the au­thor­ity are – en­dorse­ment of poli­cies and nec­es­sary pro­ce­dures to pro­tect and sup­port com­pe­ti­tion, re­ceiv­ing com­pe­ti­tion-re­lated no­ti­fi­ca­tions, ap­pli­ca­tions and com­plaints, and in­ves­ti­ga­tions of agree­ments, con­tracts and prac­tices.

It also com­piles mar­ket data with the co­op­er­a­tion of rel­e­vant au­thor­i­ties, de­mands dis­clo­sures from con­cerned per­sons, and fol­lows up no­ti­fied agree­ments, con­tracts, prac­tices, merg­ers, com­bi­na­tions of man­age­ment, unions, and ac­qui­si­tions of as­sets.

In ad­di­tion, the au­thor­ity also re­ceives com­plaints from peo­ple con­cern­ing un­fair trade ac­tiv­i­ties.

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