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Govt divided on imposing taxes on firms Furore over minister’s comments

KUWAIT CITY, Dec 18: The statement issued by the Minister of Finance Sheikh Salem Abdulaziz Al-Sabah to Bloomberg Agency recently about the ministry’s intention to impose taxes on the local companies similar to the taxes on multinational companies in Kuwait provoked immediate reactions, reports Al-Qabas daily. A number of observations and questions regarding the matter were made.

Firstly, Minister Rola Dashti affirmed in the parliament two weeks ago that the government has no intentions to impose taxes; however, Minister of Finance Sheikh Salem Al-Sabah confirmed the government’s intention to do so. This indicates that members of the government hold different stances regarding the matter.

Secondly, the fact that the minister Sheikh Salem Al-Sabah is keen on applying the recommendations of the International Monetary Fund particularly those related to taxes is not a secret. However, what are the priorities to be applied in this domain? Thirdly, the economic and financial authorities had asked about the government’s plan to control the depletion of the public fund and corruption widespread in various authorities. Fourthly, before the Ministry of Finance imposes a new tax system, it must first allot an effective mechanism for collecting the accumulated dues because some ministries neglected to collect the dues of electricity and water usage as well as the fees for public utilities. On the other hand, economic experts have unanimously accepted the need for imposing taxes if necessary.

However, they raised doubts about the timing for implementing the tax system. Meanwhile, the minister Sheikh Salem Abdulaziz Al-Sabah replied to the queries sent via mail by the Bloomberg Agency in which he said the ministry is preparing a proposal for imposing taxes on the Kuwaiti companies in an attempt to increase the government’s revenues

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