Kuwait studying tax alternative to VAT

Kuwait Upto Date • January 7, 2018 • 0 Comments

Governmental sources said Kuwait might resort to a progressive tax system as an alternative to VAT if the latter is not sanctioned by the parliament.

Kuwait is preparing to impose a tax system concurrently with the implementation of the Value- Added Tax (VAT) system in other member states of the Gulf Cooperation Council (GCC), reports Al-Anba daily.

In this regard, governmental sources said Kuwait might resort to a progressive tax system as an alternative to VAT if the latter is not sanctioned by the parliament.

This follows the enforcement of the VAT system in Saudi Arabia and the United Arab Emirates as a move to reduce dependence on oil as the main source of revenues and to provide sustainable sources of revenues for preserving the economic status and quality environment for business and investment in those two countries.The sources explained that the progressive tax system may not be imposed on individual income, but on corporate profits with a minimum profit cap.

This will exempt small and medium enterprises from paying taxes due to their low profit gains compared to major companies. The International Monetary Fund (IMF) had recommended to the Kuwaiti government to enforce corporate taxes in April 2016 by imposing ten percent income tax on corporate annual net profit instead of the current tax system of 15 percent on net profits of foreign companies.

Kuwait studying tax alternative to VAT was last modified: January 7th, 2018 by Kuwait Upto Date