Kuwait may in­tro­duce new taxes to curb state spend­ing

The Gulf Today - Business - - REGION -

KUWAIT: Kuwait needs to push through eco­nomic re­forms, coun­try’s ruler said on Tues­day, urg­ing par­lia­ment to work with the govern­ment to im­ple­ment mea­sures aimed at di­ver­si­fy­ing rev­enues and de­vel­op­ing the econ­omy.

Kuwait has been try­ing to in­tro­duce new taxes and re­form a lav­ish wel­fare sys­tem to curb state spend­ing.

“I hope that the re­cent tem­po­rary im­prove­ment in oil prices does not ob­struct this im­por­tant path, which aims to pro­tect fu­ture gen­er­a­tions,” Emir Sheikh Sabah Al-ah­mad Al-jaber al-sabah told par­lia­ment in a speech at the start of its new ses­sion.

Crit­ics say par­lia­ment has long hin­dered at­tempts at fis­cal dis­ci­pline.

The cur­rent par­lia­ment, elected in late 2016, has yet to pass any ma­jor el­e­ments of govern­ment re­forms in­tro­duced af­ter oil prices plunged in 2014.

Par­lia­ment’s bud­get com­mit­tee said last May that Kuwait would not im­ple­ment a val­ueadded tax be­fore 2021, but would push ahead this year with ex­cise taxes on se­lected prod­ucts, such as tobacco and sug­ary drinks.

The Gulf’s six oil-ex­port­ing coun­tries orig­i­nally agreed to in­tro­duce a 5 per cent VAT at the start of 2018, and Saudi Ara­bia and the United Arab Emi­rates did so.

The Gulf economies, in­clud­ing Kuwait’s, are likely to ac­cel­er­ate in com­ing years as gov­ern­ments boost spend­ing, a quar­terly Reuters poll of econ­o­mists found.

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