Kuwait mulls income tax to offset oil dip

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Kuwait mulls income tax to offset oil dip
Kuwaiti traders follow the stock market activity at the Kuwait Stock Exchange (KSE) in Kuwait City.

Kuwait City - The oil-exporting state should also ponder raising the cost of public services and cut government spending, Al Saleh said, according to a statement released by the Finance Ministry.

By Bloomberg/AFP

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Published: Thu 21 Jan 2016, 11:00 PM

Last updated: Sat 23 Jan 2016, 12:55 AM

Kuwait should consider introducing income, corporate and sales taxes to compensate for revenue lost from the plunge in oil prices to their lowest level since 2003, Finance Minister Anas Al Saleh said.
The oil-exporting state should also ponder raising the cost of public services and cut government spending, Al Saleh said, according to a statement released by the Finance Ministry.
The Amir of Kuwait, His Highness Shaikh Sabah Al Ahmed Al Sabah, already signalled on Wednesday that belt-tightening was in his country's future when he urged parliament to cooperate with the government to pass laws to reduce the budget deficit.
Shaikh Sabah said on Thursday that the country plans to cut heavy subsidies on fuel and power in a bid to offset a fall in oil revenues. "We will lift subsidies and will raise the prices of petrol, electricity and water" and reduce subsidies for other services, the Al Rai daily quoted the Amir as telling editors of Kuwaiti newspapers.
The Amir however did not give any timeframe for the measures. Last year, Kuwait liberalised the prices of diesel and kerosene.
Kuwait is the latest country to consider a departure from the spend and no-tax practices common in the Arabian Gulf. Saudi Arabia and other oil-rich Arab nations have already cut spending and discussed introducing taxes for the first time to shore up finances.
The price of oil, which contributes around 94 percent of Kuwait's revenues, has lost three quarters of its value since mid-2014. - Bloomberg, AFP

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