Kuwait may introduce new taxes to curb state spending
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.