No decision taken on remittance tax – NO TAX LIKELY BEFORE 2020 … STUDY NEEDED

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KUWAIT CITY, March 25: The parliamentary Financial and Economic Affairs Committee discussed Sunday the proposal to impose tax on the remittances of expatriates. Committee Chairman MP Salah Khourshid reiterated that the proposal is for expatriates only, adding that the committee did not reach an agreement on the proposal and it will continue its deliberations in upcoming meetings. He clarified the committee has no intention to push for imposing tax on the remittances of citizens.

On the other hand, the Health, Social and Labor Affairs Committee unanimously approved the proposal to amend Article 51 of Law No. 6/2010 regarding the end-of-service benefits for Kuwaiti employees in private oil companies, particularly the social security contributions.

In a statement to the press Sunday, Committee Chairman MP Mahmoud Khudair explained the Parliament had earlier passed a law on granting full end-of-service pay to Kuwaiti employees in private oil companies and requiring employers to shoulder the social security contributions.

He disclosed the committee on Sunday approved the proposed amendment which will be applied retroactively on all Kuwaitis working in oil companies starting from 2010. Therefore, all the contributions paid by the employees from 2010 till the date of implementing the amendment will be refunded to them. The beneficiaries include 3,150 Kuwaiti workers in private oil companies and their subsidiaries.

The State will not spend even one Kuwaiti dinar once the amendment is implemented as the money is already available in the Public Institution for Social Security (PIFSS), he added. He went on to say that Chief Executive Officer of Kuwait Petroleum Corporation (KPC) Nizar Al-Adsani and the Oil Minister have confirmed availability of the money which will be refunded to the employees upon implementation of the amendment.

He affirmed the report of the committee about the amendment will be ready this weekend and it will be included in the agenda for the next parliamentary session.

On the other hand, the Environment Protection Committee discussed the current environmental situation, desalination plants, sewage and emission of harmful gases with representatives of the Ministry of Public Works, State Ministry for Municipality Affairs and Environment Protection Authority (EPA).

Committee Chairman MP Mohammed Al-Huwailah said there are a number of old desalination plants which should stop operating but the problem is the absence of alternatives. He disclosed the committee asked the Ministry of Electricity to prepare a plan for building new plants in the coming years.

He added the representatives of Public Works Ministry talked about the illegal connection of sewage networks and they agreed to form legal teams that will search for these illegal connections and then take legal action against those behind such illegal practices.

On the other hand, the committee finalized its discussion about pollution control measures in Sabah Al-Ahmad City and asked the concerned authorities to submit reports on steps taken to address environmental issues.

Senior official at Ministry of Finance said Kuwait does not intend to enforce tax before 2020 because the companies tax file, which is a priority will be studied between the government and Kuwait Chamber of Commerce and Industry representatives, reports Al-Shahed daily.

The official said, the private sector representatives will unveil their worries about the negative impact on foreign investors over the next 5 years.

Meanwhile, the official added, the file of subsidy has yet to be looked into although the subsidy on some commodities will be lifted — commodities which do not affect the citizens.

The Ministry of Finance had previously announced two taxes will be enforced — five percent for the VAT (Value Added Tax) and 10 percent on the national and foreign companies profits.

The official said although the private sector is worried about tax being enforced, the Kuwaiti companies do not pay the tax directly, but they are committed to pay part of their profits as subsidy to national labor and Kuwait Foundation for the Advancement of Sciences in addition to a part paid for the Zakat House while the foreign companies pay about 15 percent of their profits.

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