‘Kuwait needs strong fiscal control’
KUWAIT CITY, Feb 9: The implementation of Value Added Tax (VAT) is expected to start in Kuwait by fiscal year 2021/2022, while the implementation of selective tax on tobacco products and carbonated drinks will take off by 2020/202 amid speculations that the fiscal situation will assume gradual recovery in the medium-term, reports Al-Nahar daily quoting a recent specialized report.
Report released by Economic Team of the Minister of Finance on review of January indicated that gradual recovery of the fiscal situation on a medium-term basis is associated with several other assumptions, which include slight increase in fees for services and control in the remittance systems.
It stated the outcome of International Monetary Fund (IMF)’s delegation recently indicated that Kuwait needs more fiscal control procedures, especially in the aspect of late approval of debt and continual withdrawal from the reserve fund. It pointed out that keeping a long list of total fiscal expenditures will lead to fiscal deficit in budget up to 13.5 percent with the elimination of future generations fund and investment revenue.
It reiterated the decline in prices of oil and delay of reforms are among the major sources of dangers on economic performance. It predicted further fall in the prices of oil in case the trade war between the United States and its several trade partners continues. It stressed the delay in executing many structural financial reforms will increase financial pressure, which includes high cost of funding.