Kuwait mulls cutting subsidies for citizens as deficit predictions worsen

Kuwait’s finance minister is discussing cutting government subsidies as part of an economic reform plan to alleviate the economic impact of Covid-19 and the consequent drop in oil prices across the globe.

Barak Ali Al-Sheatan addressed the cabinet regarding measures proposed to hike up taxes on services by 50 percent for citizens and three times that amount for expatriates. 

A document seen by The New Arab’s Arabic-language service in June said that service fees for non-Kuwaiti residents of the Gulf country could rise by 150%.

According to the document, the fees would be applied to the renewal of residency permits. The measures outlined included a restriction on visas for family members and the elderly, as well as a reduction in benefits for non-Kuwaitis working in the public sector.

The plan would also see an increase in the cost of key utilities, including electricity, water and fuel, by up to 30 per cent, local media report.

There are also reports of a plan to reduce the number of citizens eligible for medical treatment abroad by 50%.

The Kuwaiti Council of Ministers has called for a reduction of government spending by 20%, as the Gulf country faces the possibility of $55 billion deficit.

The economic situation in the Gulf has been highly affected by the global drop in demand for oil after the outbreak of Covid-19.

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