Kuwait warns of systematic power cuts amid heatwave

Kuwait’s government has warned it might need to introduce systematic power cuts as the country sizzles under a heatwave.

Authorities were forced to cut electricity in several areas to avoid longer blackouts on Wednesday.

The Ministry of Electricity, Water and Renewable Energy announced that power cuts of one to two hours may need to be introduced. It said they would take place between 11am and 5pm, with the exact time announced on the day via the ministry’s social media platforms.

Kuwait’s national news agency, Kuna, said the ministry “blamed soaring temperatures”.

Temperatures reached 51 °C on Thursday. And it is predicted to get hotter over summer.

On Wednesday, the ministry said it had taken "pre-emptive steps" including brief power cuts to ensure "stability" on the national power grid, Kuna reported. The ministry appealed to citizens to limit electricity consumption between peak hours of 11am to 5pm.

Fuad Al Own, a former official at Kuwait’s electricity and water ministry, told Bloomberg that he is not surprised about the crisis the nation finds itself in.

“I expected it to happen two or three years ago,” he said in an interview. “No one understood the importance of taking preventive measures, you have to plan years in advance.”

Countries across the Middle East are experiencing a heatwave.

Several countries have resorted to systematic power cut to save electricity.

In Egypt, the government has mandated daily power cuts as it struggles with an economic crisis.

Despite its rich oil resources, Iraq also faces widespread power cuts. Iraqis also attribute the electricity shortage to corruption, as well as years of conflict.

Lebanon has faced chronic electricity shortages for decades, with many Lebanese blaming corruption within the ruling elites.

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Group A: Palmeiras, Porto, Al Ahly, Inter Miami.

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Group D: Flamengo, ES Tunis, Chelsea, Leon.

Group E: River Plate, Urawa, Monterrey, Inter Milan.

Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks.

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.

8. Pillar 2 implementation

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer