Markaz participates in PwC’s seminar on Kuwait taxation

Kuwait Financial Centre “Markaz” affirmed its commitment to staying abreast of the latest developments and trends in the industry and creating awareness of changes in industry standards, regulations, and requirements across local, regional, and global markets. This was reflected in the participation of Ali H Khalil, Markaz’s CEO, at the ‘Kuwait Annual Tax and Legal Seminar’ organized by PwC, along with the presence of government officials, prominent tax experts, and business leaders from various sectors across the country.

Speaking at a panel discussion on the impact of Kuwait’s taxation laws, Khalil emphasized the relevance of the new taxation laws in Kuwait’s ongoing efforts to align with global taxation namely, the OECD/G20 inclusive framework on Base Erosion and Profit Shifting (BEPS). He explained that the company’s focus is on the opportunities rather than the commonly perceived challenges of the new tax regime. Khalil elaborated on the impact of corporate tax regimes on four major areas of such laws: company’s earnings, market values of companies, investors’ behavior, asset allocation preferences and mindset, as well as operational readiness towards compliance and enforceability. Stressing that the implementation of taxation in Kuwait will also contribute to the government’s effort to diversify its revenues, but will have a wide-ranging impacts on consumers’ purchasing power and their investment behavior. The government can also use tax policy as a tool to encourage long term investments and other behavior conducive for economic growth, business formation and job creation. Khalil remarked the importance of adopting the right mindset when it comes to taxation. For corporate taxpayers, he recommended being proactive and equipped with the right knowledge to handle their tax responsibilities, including outsourcing to tax professionals due to the level of knowledge required, the cost of operation, and the need to focus on the core business.

As for the Kuwait Tax Authority, he stressed the importance of close collaboration with the tax payers such as organizing information and discussion seminars and roundtable that speed up and facilitate implementation.

Khalil added that, given Kuwait’s ambitious plans to diversify its economy and maximize its private sector workforce in line with the aspirations of its young and talented population, it is vital for the nation to overcome challenges and achieve sustained progress. He identified a few essential priorities for the nation to capitalize on the new opportunities, such as enhancing the ease of doing business, as already demonstrated by the growing digitization across various ministries.

Concluding, he stated that the concept of taxation is a partnership between the private sector and the government. Taxation creates an alignment of interest between the two sectors, whereby the growth in earnings and the success of the private sector increase positively impacts the tax collection by the government.