Kuwait's new law sets deadline, penalties for unpaid service fees

Zawya

3 days ago

Kuwait - In a move aimed at tightening fiscal discipline and ensuring the effective recovery of dues, the Kuwaiti government has issued Decree-Law No. 75 of 2025 concerning the collection of fees and financial costs for the use of public facilities and services.
The law introduces a framework to govern the financial relationship between ministries, public institutions, and beneficiaries of state-provided services, reinforcing the principle that public utilities—ranging from electricity and water to telecommunications and transport—are not free but must be paid for under regulatory and administrative mandates.
Core Provisions and Mechanisms
Automatic Service Suspension and Installment Flexibility
Under Article 1, if a debtor (whether an individual or a private legal entity) fails to pay dues within 30 days of notification, the concerned ministry or public body may temporarily suspend services. This suspension is lifted automatically through the government's digital systems once the outstanding amounts are paid. The law allows for installment-based repayments for those financially unable to settle the dues in one go, pending approval from the creditor. However, failure to adhere to the installment plan leads to its cancellation and the immediate initiation of debt recovery procedures.
Mandatory Grievance Process Before Legal Action
To prevent unnecessary litigation, Article 2 mandates that any individual disputing the suspension of services or the calculation of dues must first file a written grievance with the concerned authority. A response must be issued within 30 days. If no response is given, it is considered a rejection. Only after this process can a lawsuit be filed—within 30 days of either the rejection notice or the lapse of the response period, whichever comes first.
Priority Lien on Debtor's Assets
In a bold move to secure state revenues, Article 3 grants government creditors a statutory lien over all assets—movable and immovable—owned by the debtor. This gives the state legal priority in recovering its dues ahead of other creditors.
Immediate Enforcement of Debt Recovery
Article 4 elevates any official debt document or collection decision issued by a government entity to the status of an 'executive instrument.' This means the state can enforce collection directly without the need to go through lengthy court proceedings, following the procedures of Kuwait's Civil and Commercial Procedures Law.
Ten-Year Statute of Limitations with Interruptions
Article 5 introduces a 10-year statute of limitations for fee collection, starting from the due date or the end of the relevant fiscal year for annual fees. Crucially, this limitation can be interrupted by any official notice from the creditor that includes the outstanding amount and a request for payment, effectively restarting the clock on the limitation period.
Judicial Fees Exempted
Article 6 clearly states that the new law does not apply to judicial fees, which remain governed by Kuwait's Judicial Fees Law No. 17 of 1973.
Rationale Behind the Legislation
The explanatory note accompanying the law clarifies that the government's decision stems from widespread abuse of the existing system. Many beneficiaries of public services—including water, electricity, communications, and municipal services—have delayed or avoided payments, thereby burdening the state financially.
This law is not meant to serve merely as a budgetary resource measure, but as a strategic tool for ensuring the efficient management of public utilities and discouraging negligence by debtors. It aims to restore the financial discipline required for a sustainable public service framework.
Moreover, the government recognizes that some debts have accumulated to levels beyond immediate payment. By permitting structured payment plans, the law seeks to offer a balanced approach—enforcing payment obligations while recognizing genuine financial hardship.
Implementation Timeline
Article 7 mandates that ministers shall enforce the law within their jurisdictions, and it will come into effect three months from the date of its publication in the Official Gazette.
Decree-Law No. 75 of 2025 marks a pivotal shift in Kuwait's approach to public service fee collection. By combining legal enforcement with digital automation, flexible repayment options, and judicial safeguards, the law positions the state to better protect public funds while promoting accountability among service users. It's a clear message that the era of unchecked fee evasion is coming to an end.
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