Kuwait Times - 25/5/2006
The Cabinet held its meeting yesterday chaired by His Highness the Prime Minister Sheikh Nasser Al-Mohammad Al-Ahmad Al-Sabah to discuss the draft law for amending the income taxation decree of the year 1955. Deputy Prime Minister, Minister of State for Cabinet Affairs and Minister of State for National Assembly Affairs, Mohammad Dhaifallah Sharar, said following the meeting that, based on the presentation made by Finance Minister Bader Mishari Al-Humaidhi, the Cabinet discussed the draft law on amending some clauses of the income taxation decree number three for the year 1955.
The Cabinet members found the draft law to be in line with developments in taxation legislations around the world, market economies, globalisation, the General Agreement on Tariffs and Trade (GATT) agreement, and other economic and commercial developments.
The draft law eliminates negative aspects of the current law, especially in relation to unclear standards for imposing the tax and the high tax percentage in comparison to other countries, which made the country unattractive for foreign companies or to evading taxes.
The amendment aims to encourage foreign investment and protect Kuwaiti consumers from the affects that high income taxes would have on them. The amendment places a clearer framework for imposing taxes, whereby taxes would be reduced from the current 55 per cent to 15 per cent, thus being in tune with other systems. The Cabinet gave initial approval for the draft law and referred it to a legal team to place its final draft, in preparation for approving it and referring the draft law to His Highness the Amir.