Taxes in Kuwait

Muna Al-Fuzai

Muna Al-Fuzai

Last week the minister of finance said that the government will not enforce income tax on individuals. As for subsidies, he stated that the government has been reviewing this system, adding that some services such as diesel do not necessarily require to be subsidized because of the low number of beneficiaries and that electricity is also included in the review.

He indicated that a report on those who benefit from subsidies will be forwarded to the government for a final decision as soon as it is completed. He made a point about the government’s wish to ensure the rights of middle class people! Now, no personal income tax is levied either on salaries or on income from commercial activities. Taxation in Kuwait is governed by Amiri decree number 3/1955 and this could be the main reason expatriates are encouraged to work here, and it has helped many local companies to grow and make huge wealth. Not that I agree completely with this, but this is happening since a long time.

What really attracts my attention are two things. First, the government clearly fears to even suggest a change to commercial codes, even the one made in 1955 to develop its vision over the subsidy system and who are the ones who should or should not be involved. Secondly, the government is assuring to protect the rights of middle class people. But who are the middle class here? How can the Kuwaiti government identify those in the middle class and what criteria they are using if no taxation is applied.

I know that there is no poverty line here and I surely have never heard about an official criteria being used to measure Kuwaitis who fall under that line or those who are categorized as middle class. We all seem to know who are the richest families from appearances. But we don’t know about the size of their wealth except when Forbes magazine makes its yearly survey of the richest people on earth.

I personally believe that there is a need to set new lines in Kuwait to define social classes. When a government official speaks about them, we would all know who are they and then we can trust his word or not. Some reports have mentioned that a family of five persons with a monthly income that is less than KD 1,000 is labeled as poor here.

But that seems so general. What about bedoon families, who are labeled as non-Kuwaitis! Do you measure them as locals or not? More serious efforts are needed to be put in this field based on international guidelines.

By Muna Al-Fuazai

The post Taxes in Kuwait appeared first on Kuwait Times.

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