Vat May Be Replaced By Excise Tax In Kuwait

Kuwait Times reported that Kuwait may choose to apply excise tax as its first choice for tax collection instead of value added tax (VAT).

In Kuwait, VAT is widely rejected both at the popular and parliamentary levels, and the government has excluded it from its plans for the next three years.

The move is to apply excise tax on tobacco and its derivatives, soft and sweetened drinks and luxury goods such as watches, jewelry and precious stones, as well as luxury cars and yachts, the Daily reported. The tax may be in the range of 10 to 25 percent.

Kuwait wants to implement VAT in accordance with its agreement with Gulf Cooperation Council countries, but it is currently difficult to have it approved by the national assembly due to popular and parliamentary opposition.

The proposed excise tax is expected to bring around KD 500 million annually, noting it does not affect incomes of low- and middle-income people, as it targets luxury goods that are not considered to be basics for living.

 

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