KUWAIT CITY, Jan 15: Minister of Finance, Minister of State for Economic Affairs and Investments Nora Al-Fassam said her department is preparing a selective taxation law targeting commodities harmful to human health, with projections the levies would reap KD 200 million (USD 648.3 million) per year. In an exclusive interview with KUNA, Al-Fassam said one of the major steps, expected to be taken soon, at the level of reforming taxation in Kuwait, is levying taxes on corporate income. She alluded in particular to the decree into- law 6/2024 for the Exchange of Information for Tax Purposes and the decree 157/2024 for taxation on multi-national entities.

Kuwait joined, on November 15, 2023, the Organization for Economic Cooperation and Development/ G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) that involved 140 states and judicial districts. Since then, it has been exerting efforts to tackle international taxing evasion, and enforce a more transparent taxation environment; some of the key steps for the reforms in this field. Alluding further to some of the moves for taxing reforms, the minister cited the enactment of treaties on double taxation, combating financial evasion, and working out accords for encouragement and mutual protection of investments, in addition to ratifying some international treaties in the realm of taxation cooperation.

She indicated the entities that are compelled to pay the taxes according to the decree-into-law 157/2024 would not be compelled to pay levies for workers as stipulated in law 19/2000, neither with respect of the alms proportion stipulated in law 46/2006 for the period that began on January 1st. Companies that pay financial contributions to the Kuwait Institute for Scientific Research will continue to pay, she said, noting that the decree into la 157/2024 mentions no pardon for the companies in this respect. Asked on the companies and groups exempted from the taxation law of the multi-national entities, the minister said they include some government entities, non-profitable organizations, international agencies, pension and investment funds.

The estimated proceeds from the projected fees on the multi-national entities amount to KD 250 million (USD 810.6 million) per annum. The enforcement and the levying will be effective during the 2027-2028 period. The preliminary count of the entities subject to this tax stands at 300 groups, including 20 Kuwaiti groups and 25 Gulf groups. The rest are foreign groups that operate in Kuwait -- estimated at 225 groups or entity.

Enforcing the tax is in line with the State of Kuwait Vision 2035, aimed at achieving a diversified and sustainable economy. The proceeds will contribute to diversifying the non-oil returns and stem the siphoning of the returns to other states. Minister Al-Fassam affirmed that enforcing the tax would contribute to boosting Kuwait’s role at the level of international cooperation for achieving just taxing practices.