Kuwait cuts taxes on foreign companies

Subject: Kuwait cuts taxes on foreign companies Tue Jan 01, 2008 7:56 pm

KUWAIT CITY - Kuwait's Parliament yesterday passed a law cutting taxes on profit of foreign companies to 15 percent, abolishing a progressive scale with a maximum rate of 55 percent, in a bid to attract investments and diversify the economy.

The 36-to-17 vote amended a 1955 tax law seen as a stumbling block to plans to transform Kuwait into a regional financial and commercial hub.

Oil is the mainstay of the country's economy, which is largely dependent on government spending.

Finance Minister Mostafa al-Shemali told the assembly that Kuwait attracted less than $300 million in foreign investment last year, compared to some $18 billion for Saudi Arabia.

"This law will encourage foreign investors to enter Kuwait," lawmaker Ahmed Baqer, head of the parliament's finance panel, told reporters after the vote.

"This is a somewhat competitive percentage . . . which is internationally acceptable," said economic analyst Ali al-Nemash. But he added much more is needed to lure foreign investors to a country known for being "consumer oriented" and for "exporting capital."

Investors complain of visa restraints and excessive red tape to set up businesses.

Most Kuwaitis work for in the public sector. Young graduates would rather wait years for a government job - long considered one way of distributing oil wealth - than work in a private company.

Reforming the economy requires unpopular measures that would have to be sanctioned by parliament, including introduction of income tax, privatizing utilities, and shrinking the cradle-to-grave welfare system Kuwaitis have long taken for granted.

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Subject: Re: Kuwait cuts taxes on foreign companies Tue Jan 01, 2008 8:15 pm

CovOps wrote:: Oil is the mainstay of the country's economy, which is largely dependent on government spending.

Umm... shouldn't that be more like "the government is largely dependent on oil revenues"? ;)

Subject: Re: Kuwait cuts taxes on foreign companies Tue Jan 01, 2008 10:04 pm

Bingo!

Kuwait cuts taxes on foreign companies

Kuwait cuts taxes on foreign companies

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