Kuwait expects record non-oil revenue in 2026-27

• $11.5bn non-oil revenue predicted
• New corporate taxes
• PMI remains positive

Kuwait expects its non-oil revenues to climb to an all-time high of more than $11 billion during its next fiscal year as it pushes ahead with plans to increase taxes and fees on government services.

The Kuwaiti finance ministry, which sent the 2026-2027 draft budget to the cabinet this week for approval, said non-hydrocarbon earnings are projected to rise by nearly 19.6 percent compared with the current 2025-2026 fiscal year.

Budget details published by the ministry on its website on Thursday estimated the non-oil income at a record high of around KD3.5 billion ($11.5 billion) during the 2026-2027 fiscal year, which will start on April 1.

Last year, the ministry reported in its 2025-2026 budget details that the non-oil revenues reached their highest level of nearly KD2.9 billion.

Analysts said the ministry projected a surge in such revenues in the next fiscal year following its decision to impose corporate taxes and increase public service fees.

“I even expect non-oil revenues to rise further during the coming years as the country seems determined to upgrade its tax system and widen service fees,” said Ali Al-Anzi, director of the Kuwaiti Almanakh economic consulting centre.

A 15 percent tax on multinational entities came into effect in early 2025 and officials said it would support the non-oil income that has provided the country with less than 10 percent of its national revenues in recent years.

In January last year, a decree also allowed ministries to raise charges for public services, which have remained unchanged for the past three decades.

Proposed by the government, the decree abolished a 1995 legislation passed by the National Assembly prohibiting the government from raising charges for public services without the prior approval of lawmakers.

The Kuwaiti daily Al-Rai, quoting finance ministry sources, said service fee hikes are expected to fetch Kuwait nearly KD500 million annually.

Public services include electricity, water, communications, health, visas and other services offered to the public, mainly to the dominant expatriate community.

Kuwait also expects to generate nearly $825 million from the 15 percent tax on multi-national entities in the country. An annual income of nearly $660 million is also forecast to be generated from a “sin tax” on unhealthy products proposed by the IMF.

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Kuwait’s non-oil sector has seen business conditions strengthened in each of the past 17 months, according to the monthly S&P Global Kuwait Purchasing Managers’ Index.

The headline PMI was 53 in January, down slightly from 54 in December but still above the 50 mark that indicates economic expansion.

“The Kuwaiti non-oil private sector started 2026 in very much a similar vein to how it ended 2025. Marked improvements in output and new orders were registered again as advertising and competitive pricing continued to drive growth,” said Andrew Harker, economics director at S&P Global Market Intelligence.

The 2026-2027 draft budget, which must be endorsed by parliament and the Emir, forecast revenues at KD16.3 billion and expenditure at KD26.1 billion, with a projected shortfall of KD9.8 billion.

The deficit is nearly 55 percent higher than the previous fiscal year’s shortfall of KD6.3 billion, the finance ministry said.