Dr. Sarah Khaled Al Sultan
Assistant Professor of Financial and Tax Laws
Department of Public Law, Faculty of Law,
University of Kuwait

Abstract:

In practice, there is widespread confusion between types of public finance costs, specifically between fees and public taxes. This confusion occurs on the part of both the legislator and the administration, but the administration’s confusion between these public costs may violate the constitutional controls for imposing public costs. Perhaps the financial deduction for the benefit of the Kuwait Foundation for the Advancement of Sciences is a unique example that combines the inaccuracy in the administration’s adaptation of public revenues on the one hand.
On the other hand, violating a number of constitutional controls related to the imposition and allocation of public revenues. At the end of 2022, the executive regulations of the Companies Law were amended, and an article was added obligating shareholding companies to deduct 1% of their annual profits and supply them to the Kuwait Foundation for the Advancement of Sciences.
With the aim of providing financial support to the institution, this recent amendment to the executive regulations of the Companies Law has sparked a legal controversy over the constitutionality of what is stated in this article, specifically, the aforementioned amendment raises two constitutional problems:
1- The extent of the constitutionality of obliging companies to deduct a percentage of their profits based on the executive regulations of the law, in accordance with the provisions of Article (134) of the Kuwaiti Constitution related to the principle of tax legality, which requires the imposition of general taxes by law.
2- The extent of the constitutionality of allocating a percentage of companies’ profits to the Kuwait Foundation for the Advancement of Sciences by administrative decision in accordance with the provisions of Article (141) of the Kuwaiti Constitution related to the principle of budget prevalence, which stipulates that allocating public revenues for a specific expense can only be done by law.
Examining these two problems requires examining a preliminary issue, which is the legal nature of the obligation imposed by the regulations, specifically the extent to which this deduction is considered public revenue, and an accurate explanation of its type.
The research concluded that it is more likely to adapt the mandate imposed on the general tax, which results in serious constitutional suspicions surrounding the financial deduction for the benefit of the Kuwait Foundation for the Advancement of Sciences, in accordance with Articles (134) and (141) of the Kuwaiti Constitution. Therefore, the researcher recommends the necessity of reconsidering the share tax of the Kuwait Foundation for the Advancement of Sciences, either by approving it by the legislator, or canceling it by the administration that issued it.
The study adopted the analytical approach to answer these questions, with reference to the constitutional controls for imposing public costs in accordance with the Egyptian and French legal systems. The original addition to the research goes beyond a recent problematic study is to explain the nature of the financial deduction for the benefit of the Kuwait Foundation for the Advancement of Sciences, and the extent of its compatibility with the constitutional controls in Kuwait.
The study represents a reference for researchers to explain the nature of the tax obligation in general, and the provisions for its imposition in accordance with the latest rulings of the Constitutional Court in the State of Kuwait, which have not been subjected to examination and conclusion of the settled from the jurisprudence of the court before, according to the researcher’s knowledge.
Keywords: public revenues, general tax, the principle of budget commonality, the principle of tax legality, and the share of the Kuwait Foundation for the Advancement of Sciences.

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