04.28.22

Proposal of implementing Selective Taxation System

As part of the Gulf Cooperation Council (GCC) agreement signed in 2016, the GCC member states agreed to a harmonized value-added tax framework. The Kuwaiti government initially planned to adopt the VAT system by 2021 but delayed the date to 2023. A further postponement could, however, be possible in view of the rising oil price and high inflation in the country.

Instead of the VAT system, the Government is pursuing the idea of implementing a selective taxation, which will apply on tobacco and related products, soft and sweetened drinks, luxury goods such as watches, jewellery, and precious stones as well as cars and yachts. The selective tax rate will range from 10 to 25% and is estimated to bring approximately 500 million dinars annually for the government when implemented.

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