Ministry of Finance Undersecretary Khalifa Hamadah said the annual revenue from value added tax (VAT) and GCC unified selective excise tax is estimated at KD 600 million, which will not completely eliminate the State budget deficit but it will contribute to the promotion of non-oil revenues; thereby, reducing the deficit.
It has been reported earlier that the minister of finance prepared a draft law on excise tax — Excise Bill — in accordance with the Gulf Cooperation Council (GCC) Unified Treaty for Excise Taxation. This tax will be imposed on manufacturing, cultivating or changing the composition of excise goods; and on selective goods that are harmful and luxurious. The proposed excise tax is 100 percent of the sale or retail price of tobacco and energy drink products, and 50 percent on soft (carbonated) drinks.
In addition, excise tax will be applicable on persons who intend to import, produce and hold excisable goods; and the bill includes stipulations on registration, filing of tax returns and penalties. On postponing the implementation of VAT and GCC unified selective excise tax, Hamadah affirmed the GCC unified selective excise tax will be implemented immediately after the National Assembly’s ratification of the GCC Unified Treaty for Excise Taxation. He added the application of these kinds of taxes is easy and simple.
MP Saleh Ashour has forwarded question to State Minister for Youth Affairs Khalid Al-Rawdhan on the suspension of more than 20 local referees. He revealed the chairman of the interim committee tasked to manage Kuwait Football Federation suspended these referees, so he demanded for a copy of the decision. He asked about the duration of suspension, reasons behind the suspension, results of investigations if any, accuracy of the report that the referees submitted a formal letter to the chairpersons of the interim committee and the Referees Committee to explain their views, and procedures taken after receiving the letter. He added the suspended referees met the minister to explain the reasons for suspension and their points of view. He inquired about the measures taken following their audience with the ministry and if they were informed about the reasons for suspension.
On another issue, Deputy Speaker of the National Assembly MP Issa Al-Kandari expressed concern over suspicions surrounding the establishment of a company to trade in oil products in Dubai. He wondered if it is feasible to establish this company and if the Supreme Petroleum Council knows details of this project. Due to these suspicions, the lawmaker submitted questions to Oil Minister Essam Al-Marzouq; stressing that oil is a vital source of national income so the legislative and executive authorities as well as the accounting and control bodies attach great importance to this resource.
He pointed out the successive reports of the State Audit Bureau (SAB) highlighted violations in Kuwait Petroleum Corporation (KPC) and its subsidiaries. While the State focuses on reducing expenses in government agencies and companies, KPC decided to establish a new company for trading products after obtaining approval from Supreme Petroleum Council despite the lack of transparency on the purpose and feasibility of this project, he added. He said a number of experts have warned against establishment of the company which will be a burden on public money, so as representatives of the nation, the lawmakers must sound the alarm bell regarding this company which has unclear objectives.
In view of the above, the lawmaker wants to know the following:
■ If the Supreme Petroleum Council is aware of all details related to the establishment of the company.
■ If any information was concealed from the Supreme Petroleum Council, especially since the experts claimed it does not know a lot of important information about the company.
■ Results of the feasibility study on establishing the company, if any.
■ Obstacles faced in assigning the marketing of refinery products to the global marketing sector in KPC, if any.
■ Ways to handle overlapping functions of two marketing agencies considering this situation will lead to confusion, chaos and conflict in dealing with customers.
■ Justification for establishing the company considering this is a violation of the directives and decisions of the Council of Ministers and State Audit Bureau which called for reducing expenditures in government bodies and companies due to low oil prices.
■ Results of studies conducted by KPC about the risks in its oil trading business in the event of high risk rates that may jeopardize the sole source of national revenue, if any.
■ Reason for establishing the company in Dubai, instead of Kuwait.
■ If Kuwaitis will be hired for the company and types of work contracts which will be offered to them.
■ Taxes which will be imposed on the company, if any.
SOURCE : ARABTIMES