The Managing Partner of Ernst & Young, Kuwait, Walid Al-Osaimi has stressed the importance of considering the major changes in the tax and economic environment at the local and international levels in the GCC countries, and the impact on the results of the companies in charge of business in Kuwait, reports Al-Anba daily.
Speaking at a symposium organized by the Ernst & Young Co, in which 100 senior executives representing regional and international companies operating in Kuwait, as well as senior officials from the Ministry of Finance took part, Al-Osaimi said the development of taxes and regulatory environment and its impact on Kuwaiti companies emphasizes the need for an in depth analysis of the impact of tax base erosion and the transfer of profits to multinational conglomerates.
“Kuwait’s delay or non-implementation of VAT and selective taxation is a missed opportunity for the state budget,” said Walid Abdul-Fadil, acting partner for the taxation sector at Ernst & Young, Kuwait.
“Every year, it loses about 850 million dinars. He stressed Kuwait resorting to the application of the tax system is no longer an option, but it is imperative because it is one of the mechanisms of financial reform required to accelerate in order to diversify sources of revenue in the state budget in light of uncontrollable oil price fluctuations.
He added the tax rate in the value added is 5%, which exempts the necessities and basics of daily life, which limit the impact of the tax, especially on low-income people. He pointed out that the benefits of applying the tax are not limited to the revenues of the state, but will push towards a new economic model of Kuwait that contributes to maintaining the sustainability of public finances, not to mention the financing of tax receipts for government- funded services, which will raise the level of quality.
Taxation has already become a core strategic business issue, and regional and international companies should take the necessary steps to be prepared to deal with the ongoing evolution of the tax and regulatory environment while continuing to comply with tax and transparency laws and regulations, say sources.
Ahmed Al Desouki, an international tax expert and tax partner at the Ernst & Young, Kuwait, said tax authorities and multinational companies in the Middle East and North Africa (MENA) region are receiving more focus on new tariff results under the Seventh Action on Preventing Corrosion of the Tax Container and Conversion.
SOURCE : ARABTIMES