Kuwait to Introduce VAT and Cut Expat Subsidies

Expat Globe

Kuwait has become the latest middle eastern state to weaken its support for its expatriate community. With rising unemployment amongst their citizen population many gulf states are introducing measures designed to boost the domestic job market at the expense of foreign born expats.

Alongside the famed low tax Kuwaiti economy that currently eschews both value added tax and income tax, expats currently enjoy generous subsidies of basic amenities including energy and water.

There are also plans to restrict the number of days in the week when expats are able to access medical services.

The Kuwait government is now seeking to end both the subsidies and is considering both a value added tax and even an income tax as part of plans designed to decrease the number of expats in the country by 100 000 per year over 10 years. Expats currently make up 68% of the population.

With over 80% of the domestic workforce working for the government the authorities are keen to grow public sector involvement by Kuwaiti citizens.

Social Affairs and Labour Minister Thekra al-Rasheedi said, "The ministry will take decisions and measures... aimed at reducing the number of expatriate workers by 100,000 every year for 10 years to reach one million (in order to) eliminate the phenomenon of a marginal workforce,"