‘Baqer tax’

Kuwait Times - - FROM THE ARABIC PRESS - By Ah­mad Al-Sar­raf

The Na­tional As­sem­bly passed a law 10 years ago called the “zakat tax” or “Baqer law”, through which the state im­posed a 1 per­cent levy to be paid by share­hold­ing com­pa­nies from their net profits. The law al­lowed com­pa­nies to di­rect what it paid or part of it to a pub­lic ser­vice or so­ci­ety through the fi­nance min­istry as men­tioned in ar­ti­cle 14 of the ex­ec­u­tive rules of the law, which in­clude the ser­vices of se­cu­rity, jus­tice and de­fense. It is not known what was the se­cret be­hind plac­ing these three ar­eas in par­tic­u­lar within “ser­vices” and al­low com­pa­nies to di­rect what they paid to them, as this is the duty of the state.

Sev­eral par­ties op­posed the law at the time, and then it was not im­ple­mented cor­rectly, while its is­suance cre­ated a po­lit­i­cal, le­gal and doc­tri­nal ar­gu­ment. Crit­i­cism con­tin­ued even af­ter it was passed.

As enough time had passed since the im­ple­men­ta­tion of the law, it is time to re­view and amend it so it goes along with re­al­ity, con­sid­er­ing the de­fects in its im­ple­men­ta­tion. As this will take time, due to all the leg­isla­tive ruckus we are go­ing through, it is nec­es­sary to con­cen­trate on how the ar­eas men­tioned in the zakat law ben­e­fited from the share de­ducted from com­pa­nies’ profits, so that it be­comes more ef­fec­tive in de­vel­op­ing civil so­ci­ety fields such as sci­ence, cul­ture, art, theater, health­care and so on.

Although the law al­lows a tax­pay­ing com­pany to di­rect what it pays to be spent on what the com­pany finds suit­able ac­cord­ing to the law, the fi­nance min­istry did not an­nounce any­thing about the ar­eas that ben­e­fited from the tax paid by the com­pa­nies de­spite the many years that have elapsed since the im­ple­men­ta­tion of the law, and it is not known what was the fate of this money.

In or­der to have an ideal ben­e­fit from the law and im­ple­ment its text, it is nec­es­sary to ac­ti­vate the right of those pay­ing the tax to di­rect their do­na­tions to so­cial char­i­ties that serve the civil so­ci­ety cor­rectly, and con­sider what is paid to them as tax ex­empt, as the case is in all other coun­tries. The same rule should ap­ply to con­tri­bu­tions to the Kuwait Foun­da­tion for the Ad­vance­ment of Sci­ences.

Ac­cord­ing to my knowl­edge, some tax­pay­ing en­ti­ties and char­i­ties that de­serve to be part of the zakat tax wrote to the fi­nance min­istry in this re­gard. The ques­tion is what was done about the re­quest to pay the en­tire share or part of it to a char­ity or oth­ers, but they did not re­ceive a re­ply. So some of them are prepar­ing to file law­suits against the fi­nance min­istry to force it to im­ple­ment ar­ti­cles of the zakat law more ac­cu­rately and hu­manly.

Many char­i­ties and so­cial pro­jects such as Bayt Ab­dul­lah, Sul­tan Ed­u­ca­tional So­ci­ety, LOYAC, Ruqaya Al-Qatami and other non­profit or­ga­ni­za­tions that bring about ma­jor so­cial re­turns and strengthen the so­cial re­spon­si­bil­ity prin­ci­ples de­serve part of the zakat money that is lost at the fi­nance min­istry and noth­ing is known about it. This is apart from the monies of the third, fifth and other zakat funds that can be di­rected to such char­ity es­tab­lish­ments.

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