KUWAIT CITY, April 21: A recent economic report says the value added tax (VAT) will be imposed in Kuwait at the beginning of the fiscal 2021/2022, which begins on the first of April 2021, reports Annahar daily.
However, the fees on tobacco and soft drinks will be imposed in 2020/2021 starting in April 2020, with a slight increase expected in government fees for services and some additional rationalization in current spending.
The report, a copy of which has been obtained by the daily, predicted non-oil sector contribution of 12.5 percent as a proportion of the GDP in fiscal 2024/2025.
The report of the Ministry of Finance economic team for March 2019, citing the International Monetary Fund (IMF), said the balance of the general budget of the state will deteriorate by about 9 percent due to the expected decline in oil revenues from current levels.
In addressing the financing needs of Kuwait according to the IMF, the main indicator of measuring the financial balance after deducting the share of future generations and excluding investment income would put 12.5 percent of GDP in a financial deficit, which, according to IMF estimates KD 35 billion equivalent to $116 billion in the coming years, which extends from 2019/2020 until 2024/2025, in about 5 financial years.
The report pointed out that the financing of these needs is distributed between the withdrawal of reserves and domestic and external borrowing.