‘Baqer Tax’

The National Assembly passed a law 10 years ago called the “zakat tax” or “Baqer law”, through which the state imposed a 1 percent levy to be paid by shareholding companies from their net profits. The law allowed companies to direct what it paid or part of it to a public service or society through the finance ministry as mentioned in article 14 of the executive rules of the law, which include the services of security, justice and defense. It is not known what was the secret behind placing these three areas in particular within “services” and allow companies to direct what they paid to them, as this is the duty of the state.
Several parties opposed the law at the time, and then it was not implemented correctly, while its issuance created a political, legal and doctrinal argument. Criticism continued even after it was passed.

As enough time had passed since the implementation of the law, it is time to review and amend it so it goes along with reality, considering the defects in its implementation. As this will take time, due to all the legislative ruckus we are going through, it is necessary to concentrate on how the areas mentioned in the zakat law benefited from the share deducted from companies’ profits, so that it becomes more effective in developing civil society fields such as science, culture, art, theater, healthcare and so on.

Although the law allows a taxpaying company to direct what it pays to be spent on what the company finds suitable according to the law, the finance ministry did not announce anything about the areas that benefited from the tax paid by the companies despite the many years that have elapsed since the implementation of the law, and it is not known what was the fate of this money.

In order to have an ideal benefit from the law and implement its text, it is necessary to activate the right of those paying the tax to direct their donations to social charities that serve the civil society correctly, and consider what is paid to them as tax exempt, as the case is in all other countries. The same rule should apply to contributions to the Kuwait Foundation for the Advancement of Sciences.

According to my knowledge, some taxpaying entities and charities that deserve to be part of the zakat tax wrote to the finance ministry in this regard. The question is what was done about the request to pay the entire share or part of it to a charity or others, but they did not receive a reply. So some of them are preparing to file lawsuits against the finance ministry to force it to implement articles of the zakat law more accurately and humanly.

Many charities and social projects such as Bayt Abdullah, Sultan Educational Society, LOYAC, Ruqaya Al-Qatami and other nonprofit organizations that bring about major social returns and strengthen the social responsibility principles deserve part of the zakat money that is lost at the finance ministry and nothing is known about it. This is apart from the monies of the third, fifth and other zakat funds that can be directed to such charity establishments. – Translated by Kuwait Times from Al-Qabas

By Ahmad Al-Sarraf


This article was published on 30/10/2016