Kuwait to study the implementation of the idea of a selective taxation which will include tobacco and its derivatives.
23 March 2022, 12:00 AM
31 March 2022, 12:00 AM
The government has taken practical steps to study the implementation of the idea of a selective taxation which will include tobacco and its derivatives, soft and sweetened drinks. This will also be applied to expensive goods, such as watches, jewelry and precious stones as well as luxury cars and yachts – instead of a value-added tax, reports Al-Qabas daily.
According to the study the application of selective taxation, on which the government is working behind the scenes will range from 10 to 25 percent.
According to the Gulf agreement signed by Kuwait in November 2016, the excise tax law will be applied to tobacco products of all kinds and forms, energy drinks at 100 percent, and soft drinks at 50 percent. As for the value-added tax, it has been set at 5%, which is added to the value of the goods at the moment they are sold and collected for the benefit of the state treasury.
Regarding excluding the application of value-added tax, the sources said that this option must be approved through the National Assembly, which is widely rejected by the people and parliament, which means that it is difficult to implement, in addition to the announced inflation in Kuwait of about 3 percent. The tangible amount exceeds 7 percent, that is, if the added tax law is applied, this trend may create further price hikes.
The sources expected that the government, in the event of applying the selective value tax, would earn about 500 million dinars annually, explaining that the application of the selective tax may have a large part of justice in the application, as whoever chooses goods harmful to health must pay more.