Kuwait's parliament approved a government-proposed bill that would slash tax on foreign firms' profits to a flat 15 per cent from up to 55 per cent.
The cabinet presented the measure in May 2006 in a bid to attract more foreign investment, but a political standoff with parliament and elections have delayed the approval of the bill.
Under a 1953 law foreign firms pay up to 55 per cent tax.
The measure becomes law after endorsement by the country's ruler. The government is expected to work out details of how the new rules would be implemented.
Under the bill exclusive agents of foreign companies such as car dealerships will also have to pay a tax of 15 per cent, while Kuwaiti merchants selling foreign products would be exempted as demanded by some lawmakers.
The tax cut plan is crucial for plans by the government to transform the Middle East's fourth-largest oil exporter into a regional financial centre like its Gulf Arab neighbours Dubai and Bahrain. (Reuters)
Kuwait MPs approve bill to cut foreign firms' tax