DUBAI: On Monday the International Monetary Fund (IMF) urged Opec member Kuwait to implement a reform package that includes Imposing taxes and phasing out subsidies to bridge a persistent budget deficit.
Kuwait, which is largely dependent on oil for nearly 90 percent of its exports, has been badly affected after crude prices collapsed in mid-2014 and accepted a budget earlier this month with a big deficit for the sixth year in a row.
READ MORE: WAPDA to file petitions for increase in tariff
However, spending, mostly on tough-to-reverse parameters such as salaries and social assistance, only increased by 25pc in the last two fiscal years, whereas the public wage bill rose by around 6.0 percent annually, the IMF said.
Kuwait, which filters 2.7 million barrels of oil a day, has huge financial reserves calculated by the IMF to be worth $644 billion. Unlike some other Gulf countries, Kuwait has a vibrant parliament that has consistently vetoed government plans to introduce public service taxes or charges.