KUWAIT, April 20 (Reuters) – Kuwait is studying proposals to introduce the same tax rates for local and foreign companies, Finance Minister Anas al-Saleh told reporters on the sidelines of a business conference on Monday.
“There is a list of taxes on local and foreign companies – there are suggestions from international institutions to study the unification of the ratios on both sides,” Saleh said without elaborating on the proposals or saying when they might be approved.
Last month Minister of Commerce and Industry Abdulmohsen al-Madaj, who has since resigned, said Kuwait was cooperating with the International Monetary Fund to discuss introducing a corporate tax for local companies. Saleh is now acting commerce minister in the wake of Madaj’s departure.
At present, Kuwaiti companies generally do not pay taxes on income, although foreign firms pay a levy on commercial activities in the country with the rate on the highest income bracket reaching 55 percent, according to a government website.
Introducing a new corporate tax would be a major, politically sensitive policy shift for Kuwait. Pressure on its state finances has increased in recent months because of the plunge of oil prices, and officials have said they want to diversify revenue sources beyond oil.
There are no plans to introduce income tax for individuals, Saleh added on Monday. (Reporting by Ahmed Hagagy; Writing by Hadeel Al Sayegh; Editing by Andrew Torchia)