Kuwait studying alternative tax to VAT

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Kuwait studying alternative tax to VAT

Kuwait studying alternative tax to VAT

Kuwait is preparing to impose a progressive tax system as an alternative to VAT if the latter is not sanctioned by the parliament, local daily Arab Times reported citing Al-Anba Arabic news paper.

According to report, the progressive tax system may not be imposed on individual income, but on corporate profits with a minimum profit cap. This will exempt small and medium enterprises from paying taxes due to their low profit gains compared to major companies.

This move follows the enforcement of the VAT system in Saudi Arabia and the United Arab Emirates. Earlier, the International Monetary Fund (IMF) had recommended to the Kuwaiti government to enforce corporate taxes in April 2016 by imposing ten percent income tax on corporate annual net profit instead of the current tax system of 15 percent on net profits of foreign companies.

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