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Countries With Zero Income Taxes


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With the world's sixth-largest oil reserves, Kuwait's petroleum accounts for nearly half its GDP, over 90 percent of export revenues and 80 percent of government income, according to OPEC.

While there is no income tax in the country, Kuwaiti nationals must contribute 7.5 percent of their salaries for social security benefits; their employers make an 11 percent contribution. Despite being one of the world's wealthiest countries per capita, strikes and protests by public sector workers unhappy about pay have led the government to introduce a 25 percent increase in wages in 2012. The IMF, however, warned Kuwait in May last year that such spending could impact the sustainability of its public finances. Only 7 percent of Kuwaitis work in the private sector, and the rising cost of retirement could put pressure on government spending.

Kuwait is no stranger to political turmoil, ushering in five new parliaments in the past six years. The country has been marred by protests and corruption scandals implicating key political figures, while poor parliament-government relations have hampered policymaking. The IMF has recommended that Kuwait introduce a value-added tax and a comprehensive income tax system.

Pictured: Kuwaiti women walking through a souq.

Photo: Celia Peterson | Getty Images