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Kuwait to postpone VAT implementation to 2021, says parliament committee

Published: Updated:

Kuwait will not implement value-added tax before 2021 but will push ahead with introducing excise tax, parliament's budget committee said in a statement posted on the assembly's website on Tuesday.

"The committee said implementation of value-added tax in Kuwait will be postponed until 2021, and that the finance ministry saw the need to expedite measures for excise tax on select products such as tobacco, energy drinks and carbonated drinks," it said without elaborating.

The Gulf Arab countries originally agreed to introduce VAT at a 5 percent rate at the start of this year, and Saudi Arabia and the United Arab Emirates did so. But the other four countries delayed.

Gulf governments also agreed jointly to introduce an excise tax on tobacco and sugary drinks, which will raise much less money than VAT. Kuwait's finance minister said on Monday that he expected parliament to approve the excise tax during its next session, which begins in October.