Follow-up on KFAS study
with time, the financial resources of the kuwait foundation for the advancement of sciences decreased due to the discovery of some loopholes in the law of some companies since its establishment that does not hold accountable those that give up paying a percentage of their profits to the foundation.
there has also been a development related to the possibility of appealing against the unconstitutionality of its decisions, especially those related to reducing the contributions of shareholding companies to the institution’s budget from 5% to 3% and to 1% later, as article 134 of the constitution explicitly states that establishing, amending and abolishing public taxes is only by law.
no one shall be exempted from paying all or part of it except in the cases specified by law. no one may be assigned to pay other taxes, fees, and costs, except within the limits of the law.
article 143 stipulates that the budget law may not include any text that would create a new tax, increase an existing tax, amend an existing law, or avoid issuing a special law on a matter that this constitution stipulates that a law must be issued in this regard.
thus, in the view of some legal experts, cuts from 5% to 3%, and then to 1%, would be unconstitutional. this may have prompted the majority of the joint-stock companies to stop paying what they owe, which caused the institution’s resources to become scarce, and prompted it to contact the ministry of commerce and industry and express its fears, calling for the requirement for companies to submit a clearance issued by the institution before they can hold their general assemblies.
what happened to the recent companies law no. 25 of 2012, in which the wording of the new contracts was changed, with the removal of the item related to the enterprise’s share from the form of standard contracts, has the effect of depriving the enterprise of the obligation to collect its prescribed share of the companies profits.
in its letter to commerce, the corporation referred to the amiri decree issued on december 8, 1976, regarding its establishment, explaining that this decree endowed it with a special nature, and provided it with government care and support and that it obtains its revenues from the annual contributions of all kuwaiti shareholding companies.
accordingly, on january 15, 2023, the ministry of commerce issued a ministerial decision (184/2022) obligating the joint-stock companies to include a clause in the joint-stock company’s budget stipulating that one percent of the net annual profits of the joint-stock companies be calculated for the benefit of the kuwait foundation for the advancement of sciences, provided that the percentage stipulated in the decision is deducted and transferred to the institution, before the convening of the general assembly.
accordingly, all the objections raised by “law professors” regarding the unconstitutionality of what is paid to the institution from corporate profits become baseless.
