Kuwait City: Kuwait Financial Centre “Markaz” affirmed its commitment to staying abreast of the latest developments and trends in the industry and creating awareness of changes in industry standards, regulations, and requirements across local, regional, and global markets. This was reflected in the participation of Mr. Ali H. Khalil, Markaz’s CEO, at the ‘Kuwait Annual Tax and Legal Seminar’ organized by PwC, along with the presence of government officials, prominent tax experts, and business leaders from various sectors across the country.
Speaking at a panel discussion on the impact of Kuwait’s taxation laws, Mr. Khalil emphasized the relevance of the new taxation laws in Kuwait’s ongoing efforts to align with global taxation namely, the OECD/G20 inclusive framework on Base Erosion and Profit Shifting (BEPS). He explained that the company's focus is on the opportunities rather than the commonly perceived challenges of the new tax regime.
Mr. Khalil elaborated on the impact of corporate tax regimes on four major areas of of such laws: company’s earnings, market values of companies, investors’ behavior, asset allocation preferences and mindset, as well as operational readiness towards compliance and enforceability. Stressing that the implementation of taxation in Kuwait will also contribute to the government’s effort to diversify its revenues, but will have a wide-ranging impacts on consumers’ purchasing power and their investment behavior.
The government can also use tax policy as a tool to encourage long term investments and other behavior conducive for economic growth, business formation and job creation. Mr. Khalil remarked the importance of adopting the right mindset when it comes to taxation. For corporate taxpayers, he recommended being proactive and equipped with the right knowledge to handle their tax responsibilities, including outsourcing to tax professionals due to the level of knowledge required, the cost of operation, and the need to focus on the core business. As for the Kuwait Tax Authority, he stressed the importance of close collaboration with the tax payors such as organizing information and discussion seminars and roundtable that speed up and facilitate implementation.
Mr. Khalil added that, given Kuwait’s ambitious plans to diversify its economy and maximize its private sector workforce in line with the aspirations of its young and talented population, it is vital for the nation to overcome challenges and achieve sustained progress. He identified a few essential priorities for the nation to capitalize on the new opportunities, such as enhancing the ease of doing business, as already demonstrated by the growing digitization across various ministries.
Concluding, he stated that the concept of taxation is a partnership between the private sector and the government. Taxation creates an alignment of interest between the two sectors, whereby the growth in earnings and the success of the private sector increase positively impacts the tax collection by the government.
About Kuwait Financial Centre “Markaz”
Established in 1974, Kuwait Financial Centre K.P.S.C “Markaz” is one of the leading asset management and investment banking institutions in the MENA region with total assets under management of over KD 1.16 billion as of 30 September 2023 (USD 3.75 billion). Markaz was listed on the Boursa Kuwait in 1997. Over the years, Markaz has pioneered innovation through the creation of new investment channels. These channels enjoy unique characteristics and helped Markaz widen investors’ horizons. Examples include Mumtaz (the first domestic mutual fund), MREF (the first real estate investment fund in Kuwait), Forsa Financial Fund (the first and only options market maker in the GCC since 2005), and the GCC Momentum Fund (the first passive fund of its kind in Kuwait and across GCC that follows the momentum methodology), all conceptualized, established, and managed by Markaz.
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