The parliament in the Kingdom of Bahrain approved doubling the value-added tax to ten percent, as part of plans to reform public finances.
In this context, Bahraini parliamentarian Ahmed Al-Salloum confirmed that, "the parliament, agreed to increase the value-added tax from five percent to 10 percent after detailed discussions with the government during the past weeks, realizing that this measure represents a fundamental pillar in the fiscal balance program in the Kingdom".
An increase in value-added tax, which is expected to start as of next year, could increase revenues by about three percent of gross domestic product in the next few years, up from about 1.7 percent this year, according to estimates by Standard & Poor's the international credit rating agency. While there are expectations that prices will rise, the value-added tax affects consumers directly. However, Saudi Arabia, Kuwait and the UAE had supported Bahrain with a $10 billion rescue package to spare it a credit crunch in 2018. Those funds were linked to a set of public finance reforms, but after the coronavirus crisis strained the kingdom’s finances, Bahrain postponed plans to balance its budget for two years and announced plans to increase value-added tax in last September.
Source (The New Arab Newspaper, Edited)
