Kuwait may take 4 years to introduce personal taxes

Kuwait may take 4 years to introduce personal taxes
Kuwait was among the signatories of the GCC Common VAT Agreement in 2016. (Reuters)
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Updated 06 May 2021

Kuwait may take 4 years to introduce personal taxes

Kuwait may take 4 years to introduce personal taxes
  • Political gridlock and a lack of expertise holding up plans
  • Oman became fourth GCC state to introduce VAT in April

RIYADH: It could be 3 to 4 years before Kuwait introduces taxes on its citizens as political gridlock and a lack of local expertise hinder the government’s plans, Alrai newspaper reported on Wednesday, citing unnamed sources.

There are currently no direct taxes on citizens in Kuwait, but companies pay about 4.5 percent of their net profits, including zakat and labor support and a contribution to the Foundation for the Advancement of Sciences.

In June 2016, all six GCC states signed the Common VAT Agreement, pledging to introduce a 5 percent VAT rate.

Oman introduced a 5 percent value-added tax (VAT) on April 16, the fourth Gulf Cooperation Council country to implement a so-called consumption tax.

It followed the UAE, Saudi Arabia and Bahrain. Saudi Arabia tripled its VAT rate to 15 percent last July to help fund its coronavirus relief efforts.

Kuwait’s parliament has pushed back the implementation date several times but the International Monetary Fund said last year that it expects it to be introduced by 2022. Qatar is expected to go ahead with VAT in the second or third quarter of this year and is said to be close to finalizing its tax administration system, Dhareeba.