Tax Kuwait expects tax income to soar by 79% By Nadim Kawach January 22, 2025, 2:19 PM Alamy via Reuters Kuwait intends to diversify its economy and reduce its budget deficit through a raft of IMF-proposed tax reforms including a 15% tax on multi-national companies IMF tax-reform programme Diversify non-oil income Reduce Kuwait budget deficit Kuwait expects its tax income to soar by nearly 79 percent annually when all taxes take effect within an International Monetary Fund-proposed tax reform programme. In a report published on Wednesday, the Arabic language daily Alqabas said taxes are projected to fetch Kuwait around 613 million dinars ($2 billion) in its 2024-2025 budget, which started on April 1 last year. The paper, quoting Finance Ministry documents, said new taxes announced recently would lift the Gulf country’s tax revenues to nearly 1.1 billion dinars ($3.6 billion) annually when they are fully enforced. A tax breakdown showed a planned 15 percent tax on multinational companies would raise nearly 250 million dinars ($825 million) whilee a “sin tax” unveiled by Finance Minister Noora Al-Fassam last week would fetch 200 million dinars ($660 million). According to the report, tax revenues approved by the cabinet in the 2024-2025 budget include around 175 million dinars ($577 million) in income taxes and nearly 418 million dinars ($1.4 billion) from “trade and international transactions.” “According to the sources, the government is working on a sin tax law that could impose taxes of 100 percent on tobacco products, energy drinks and other beverages,” it said. It added that plans to stop subsidies to diesel sales in Kuwait would also boost the country’s tax revenues by around 65 million dinars ($214 million). Kuwait’s multinationals tax to raise $825m a year, says minister Kuwait faces recession but will recover over medium term Kuwait overhauls tax system and signs UAE treaty GCC members have decided to adhere to so-called Pillar 2 standards sponsored by the Organisation for Economic Cooperation and Development, which mandate a 15 percent corporation tax on multi-national businesses. Opec producer Kuwait, which has the world’s sixth-largest recoverable oil deposits, have embarked on fiscal reforms in line with repeated calls by the International Monetary Fund. In its latest Kuwait review in December, the IMF said: ”The (Kuwaiti) authorities aspire to implement reforms to support the transition to a dynamic and diversified economy… To achieve this goal, a well-sequenced package of fiscal and structural reforms is needed.” Like other members of the six-nation GCC bloc, Kuwait has been heavily reliant on oil export earnings to fund its annual budgets. According to the Kuwaiti Al-Shal think tank centre, the non-oil income accounted for around 14 percent of projected revenues in the 2024-2024 budget. In a recent report, it estimated these oil revenues at around 18.58 billion dinars ($61.3 billion) while non-oil revenues were forecast at 2.68 billion dinars ($8.8 billion). Kuwait has approved its 2024-2025 budget with a forecast deficit of 5.8 billion ($19.1 billion), nearly 13.5 percent lower than the projected shortfall in the previous year.
