Kuwait Considers Expat Tax And VAT

By ExpatBriefing.com Editorial 15 March, 2013

Kuwait, a tax-free haven for expatriate workers, has announced it is considering introducing a personal income tax on foreigners' earnings to diversify the Government's revenue streams.

Although Kuwaiti finances are strong, the Government is eager to mitigate the country's reliance on oil and corporate tax revenues, to help build up larger fiscal surpluses and fund public services.

The Kuwaiti Ministry of Finance is reportedly mulling a personal income tax, which is likely to be set at a competitive low rate, and a withholding tax on remittances. To mitigate non-compliance with the regime and the development of a grey economy, foreign workers will only be allowed to repatriate income equal to their wages.

In addition, Kuwait is considering the implementation of a value-added tax regime, with a rate expected to be as low as 5%, to boost revenues available for economic expansion and to fund subsidies and welfare.

Tags: Expatriates | Compliance | Finance | Tax | Business | Value Added Tax (VAT) | Kuwait | Tax Avoidance | Fiscal Policy | Tax Planning | Tax Rates | Individual Income Tax | Services |

 





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