Kuwait legislators craft bill to cover SME debt

KUWAIT CITY: MPs Muhammad Obaid Al-Rajhi, Mubarak Al-Ajmi, Salman Al-Azmi, Soud Bu Sleeb and Farz Al- Daihani submitted a bill on the establishment of a fund that will pay part or all of the debts of the owners of small and medium enterprises (SMEs).

The bill stipulates that the beneficiaries of the fund are the owners of SMEs who received payment demands through a court verdict.

The bill states that the name of the fund shall be ‘Defaulters Fund as per Court Verdict’ and it will be a subsidiary of the Legal Advice and Legislation Department, which will issue the executive procedures and specify the representatives of ministries and public institutions in the fund.

The chairman of the Central Bank of Kuwait, as per the approval of the finance minister, will open a bank account for receiving donations to the fund.

A higher committee will be formed to manage the fund that will consist of one representative each from the Legal Advice and Legislation Department, Ministry of Finance, Central Bank of Kuwait, Charities Department at the Ministry of Social Affairs, Kuwait Anti-Corruption Authority (Nazaha), Ministry of Commerce and Industry, and National Fund for Small and Medium Enterprises.

The remuneration of the members of the higher committee will be taken from the fund and the amount will be specified by the parliamentary Businesses Environment Improvement Committee.

The fund shall receive donations from individuals, legal and financial entities, as well as the defaulters who will give maximum of five percent of the debt as donation to the fund after the approval to pay the debt on their behalf.

Part of the capital of the fund will come from donations which will be deducted from the net gains of SMEs as Zakat or tax equivalent to one percent of the net gains.

Ministries and public institutions will participate in the fund by depositing part of their revenues to the bank account allocated for the fund under the supervision of the Ministry of Finance, while 50 percent of the donations collected by charities and 0.25 percent of national revenues after deducting the amount allotted for the Future Generations Fund starting will be deposited to the same bank account from fiscal 2021/2022.

Priority in paying the debts will be based on the date of obtaining the loan, starting from the lowest debt amount; while the individuals declared bankrupt through a court verdict are excluded from the beneficiaries of the fund.

The surplus of the fund, if any, will be transferred to the budget of the following year.

The higher committee has the right to put a maximum of 10 percent of the annual surplus to the public treasury after the approval of the Legal Advice and Legislation Department. Members of the higher committee will be required to submit financial disclosure to the director of the department every year.

On the other hand, the Budgets and Final Accounts Committee on Monday discussed the final accounts of Touristic Enterprises Company (TEC) for fiscals 2018/ 2019 and 2019/2020 in the presence of the representatives of the company, Ministry of Finance, Kuwait Investment Authority (KIA) and State Audit Bureau (SAB).

The Legal and Legislative Affairs Committee on Monday deliberated on several bills in the presence of Deputy Prime Minister and Minister of Justice and Minister of State for Nazaha Enhancement Abdullah Al-Rumi, Chairman of the Supreme Judiciary Council Judge Ahmed Al-Ujail and Chairman of Kuwait Lawyers Society Shurian Al-Shurian.