Kuwait’s ministry of finance is considering imposing a tax on Kuwaiti firms that is levied on the earnings of foreign companies, in an effort to diversify the economy.
The government “may adopt proposals to extend the current corporate income tax to include Kuwaiti firms besides the foreign firms”, the finance minister Sheikh Salem Abdulaziz Al Sabah told Bloomberg yesterday.
Under Tax Law No 2 of 2008, the net income of foreign companies is taxed at a flat rate of 15 per cent.
Arnaud Louis, an associate director at Fitch Ratings, said the move would help to develop Kuwait’s economy.
“One of the key factors in determining Kuwait’s credit rating is the economy’s dependence on oil revenues,” he said. “So any move that leads to greater tax receipts and decreases that dependence would be a positive one.”
The Economist Intelligence Unit (EIU) last month lowered its forecast for Kuwait’s economic growth to 2.7 per cent from 4.4 per cent previously, citing the modest growth of Kuwait’s oil production.
GDP growth is likely to reach 3.1 per cent next year, and would accelerate to 4 per cent in 2015, bolstered by projected higher oil prices, according to the EIU.
Abdulaziz Al Yaqout, the regional managing partner of the law firm DLA Piper, said the tax move would have a positive social impact.
“It’s not about the Kuwaiti state requiring money,” he said. “The underlying aspect to the proposed change is that Kuwaiti businesses participate more in the development of of the country.
“It’s about moving them into a world where things like water and electricity are not free or as cheap as they used to be. It’ll take time, it won’t happen overnight.”
The Kuwaiti prime minister Sheikh Jaber Al Mubarak Al Sabah warned in October that the welfare state that Kuwaitis were accustomed to was unsustainable.
“It is necessary for Kuwaiti society to transform from a consumer of the nation’s resources to a producer,” he said.
Mr Al Yaqout said key aspects of the proposed tax remained unclear, such as when it would be introduced, and whether it would be a flat or progressive tax rate.
He also said Kuwait’s tax collection regime was still in its infancy, and would require a significant upgrade should local Kuwaiti firms be taxed as well.
Of immediate concern is whether the tax proposal would be accepted by Kuwaiti lawmakers, who traditionally have had an often stormy relationship with the government.
The current Kuwaiti parliament, which was elected in July, has only been sitting since October, and it remains to be seen whether such a radical proposal will pass smoothly, according to Fitch Ratings’ Mr Louis.
The current parliament was regarded as less supportive of the government than its immediate predecessor, but it was much less hostile to the government’s agenda than the parliament last year, he said.
“The fact that the move’s been announced by a minister means that the government thinks that the amendment has a chance of clearing parliament,” Mr Louis said.
jeverington@thenational.ae
Fanney Khan
Producer: T-Series, Anil Kapoor Productions, ROMP, Prerna Arora
Director: Atul Manjrekar
Cast: Anil Kapoor, Aishwarya Rai, Rajkummar Rao, Pihu Sand
Rating: 2/5
TALE OF THE TAPE
Manny Pacquiao
Record: 59-6-2 (38 KOs)
Age: 38
Weight: 146lbs
Height: 166cm
Reach: 170cm
Jeff Horn
Record: 16-0-1 (11 KOs)
Age: 29
Weight: 146.2lbs
Height: 175cm
Reach: 173cm
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UAE currency: the story behind the money in your pockets
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Results
2pm: Handicap (PA) Dh80,000 1,600m; Winner: AF Al Baher, Bernardo Pinheiro (jockey), Ernst Oertel (trainer).
2.30pm: Handicap (TB) Dh100,000 1,600m; Winner: Talento Puma, Xavier Ziani, Salem bin Ghadayer.
3pm: Handicap (TB) Dh90,000 1,950m; Winner: Tailor’s Row, Royston Ffrench, Salem bin Ghadayer.
3.30pm: Jebel Ali Stakes Listed (TB) Dh500,000 1,950m; Winner: Mark Of Approval, Patrick Cosgrave, Mahmood Hussain.
4pm: Conditions (TB) Dh125,000 1,400m; Winner: Dead-heat Raakez, Jim Crowley, Nicholas Bachalard/Attribution, Xavier Ziani, Salem bin Ghadayer.
4.30pm: Jebel Ali Sprint (TB) Dh500,000 1,000m; Winner: AlKaraama, Antonio Fresu, Musabah Al Muhairi.
5pm: Handicap (TB) Dh100,000 1,200m; Winner: Wafy, Richard Mullen, Satish Seemar.
5.30pm: Handicap (TB) Dh90,000 1,400m; Winner: Cachao, Tadhg O’Shea, Satish Seemar.
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Frankenstein in Baghdad
Ahmed Saadawi
Penguin Press
FROM%20THE%20ASHES
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The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
UAE currency: the story behind the money in your pockets
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PROFILE OF INVYGO
Started: 2018
Founders: Eslam Hussein and Pulkit Ganjoo
Based: Dubai
Sector: Transport
Size: 9 employees
Investment: $1,275,000
Investors: Class 5 Global, Equitrust, Gulf Islamic Investments, Kairos K50 and William Zeqiri
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Company%20profile
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