Kuwait may ditch VAT launch

Kuwait may consider introducing an alternative to the proposed 5% VAT regime.

Kuwait is one of the six Arab Gulf countries which committed in 2017 to launching a harmonised VAT regime within two years. On 1 January 2018, Saudi Arabia and the UAE implemented VAT. A third country, Bahrain, has committed to launching later in 2018. Qatar and Oman may launch in 2019.

Kuwait was already struggling to get its more independent-minded parliament to back the indirect tax launch, and had recently indicated a 2019 launch at best.  So the government is now reported to be exploring an alternative, progressive tax.  This could be a plain Sales Tax or Corporate Income Tax with a minimum profit cap to take small and medium sized business out of the tax net.

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