Bahrain could double value added tax

DUBAI (Reuters) -Bahrain is contemplating doubling worth added tax to 10% to spice up state revenues and scale back its finances deficit, a Bahraini parliamentary supply and a supply near the federal government informed Reuters, confirming native media experiences.

The federal government’s communications workplace didn’t instantly reply to a request for remark.

Bahrain’s financial system contracted by 5.4% final yr, the Worldwide Financial Fund has stated, because the pandemic harm very important sectors equivalent to power and tourism.

The small Gulf state has collected a big pile of debt because the 2014-2015 oil value shock. In 2018 it acquired a $10 billion monetary assist programme from Gulf allies that helped it keep away from a credit score crunch.

Amending the regulation on 5% VAT, which Bahrain launched in 2019 as a part of plans to repair its funds and improve non-oil revenues, is being mentioned between the federal government and parliament, the parliamentary supply stated.

Parliament should approve such a change within the regulation, the supply added, saying the federal government was looking for methods to guard folks with low incomes ought to the change be made.

Different options to spice up state funds have been additionally being thought-about, the supply added.

State information company BNA stated parliamentary and authorities representatives met on Sunday to debate altering VAT as a part of a evaluate of fiscal choices for the Gulf state because it emerges from the coronavirus pandemic.

The federal government reviewed preserve social assist for eligible residents whereas amending the VAT fee, the report stated, with out saying what fee it might be modified to.