Finance Minister implements a yearly $1.1 billion non-oil revenue transformation aimed at improving financial stability
In an ambitious move towards sustainable financial management and economic diversification, Kuwait's Minister of Finance and Minister of State for Economic Affairs and Investment, Eng. Noura Al-Fassam, has unveiled a comprehensive economic reform package. This ambitious plan, launched in 2025, aims to reduce the country's heavy reliance on oil and increase sustainable non-oil revenues.
At the heart of the reforms are two pivot regulations, set to take effect on July 1, marking a significant shift in Kuwait's fiscal policy. The reforms are designed to generate approximately 336 million Kuwaiti dinars (around $1.1 billion) annually in non-oil revenues, a crucial step towards fiscal sustainability and economic resilience.
The first regulation focuses on updating usufruct and service fees for state-owned real estate. This update is expected to more than double revenues from these assets, generating an estimated 156 million dinars annually. The second regulation introduces a 15% tax on multinational enterprises (MNEs) operating in Kuwait, projected to generate 250 million dinars (approximately $800 million) per year.
The tax will apply to 300 corporate groups, comprising 45 Kuwaiti and Gulf-based firms and 255 foreign entities. The reforms are instrumental in building a more diverse economy, enhancing legislative quality, attracting foreign investment, and creating jobs for the nation's youth.
In addition to these measures, Kuwait has initiated a thorough review of the public sector salary structure. The objective is to create a fair, consistent, and transparent wage system across ministries and government entities, eliminating salary disparities, and attracting skilled Kuwaiti talent to support national development goals.
Moreover, Kuwait enacted Law No. 60 on Liquidity and Public Debt in March 2025, introducing a KD 30 billion debt ceiling and enabling issuance of long-term sovereign debt (up to 50-year maturities). This law broadens access to international capital and underpins infrastructure and development projects, facilitating economic diversification. Kuwait’s membership in the Asian Infrastructure Investment Bank (AIIB) opens new financing avenues for green projects and Public-Private Partnerships in sectors like renewable energy and power generation.
These measures form a strategic framework intended to modernize Kuwait’s economy, enhance fiscal sustainability, and reduce volatility associated with oil price fluctuations by fostering resilient non-oil economic sectors and improving public sector efficiency. The reform package is part of a shift towards sustainable financial management that is resilient to oil market volatility.
With estimated revenues at 18.231 billion dinars ($59.2 billion) and expenditures expected to reach 24.538 billion dinars ($79.7 billion), the reforms aim to reduce the fiscal gap and create the space needed to fund major development projects. The reform package, which is in alignment with Kuwait Vision 2035, is a practical implementation of long-discussed strategies to expand non-oil revenue streams.
Officials note the growing importance of these measures given Kuwait's projected budget deficit of 6.3 billion dinars ($20.5 billion) for the 2025-2026 fiscal year. The combined impact of both reforms will immediately reflect an increase of KWD 336 million in this year's revenues. The reform package has been reported on by Al-Rai daily, signalling widespread attention and support for these significant changes.
In conclusion, the economic reform package launched in 2025 aims to support the general budget and ease mounting fiscal pressures. It represents a crucial step towards reducing Kuwait's reliance on oil, diversifying the economy, and fostering a more resilient and sustainable financial management system.
The economic reform package unveiled by Eng. Noura Al-Fassam in 2025 focuses on enhancing non-oil revenues, with the first regulation updating usufruct and service fees for state-owned real estate and the second introducing a 15% tax on multinational enterprises (MNEs) operating in Kuwait, contributing approximately 336 million Kuwaiti dinars and $800 million respectively to the annual budget.
