IMF discussion points to reform agenda

A flavour of Kuwait’s next phase of economic reforms was given by the International Monetary Fund (IMF), following its recent “candid and comprehensive discussions” in Kuwait; this includes the potential introduction of value-added tax (VAT) and other corporate taxes. The IMF statement issued on 21 September following its annual Article IV consultation was notable for its praise of the Kuwaiti authorities’ “close co-operation” on an agenda that includes, a gradual phasing-out of energy subsidies (estimated at 7.2% of GDP in 2015), wage reforms (including an annual salary cap linked to inflation and limits to public employment growth) and the introduction of tax.