Thank goodness for pleasant weather – we are at that happy place where we need neither the room heater nor the air conditioner for more than an hour or so in a day. Otherwise, just imagine the furore in homes and offices as we grapple with the latest revision of utilities charges that have come into effect over the weekend.
There is an exemption list for those judged to be below the ‘extravagant’ level of utilities usage or needing support: Bahrainis with only one electricity and water account make up nearly 31 per cent of the total accounts; Bahraini divorcees; widows and single women aged above 21; Bahrainis living in rented accommodation, Bahraini women married to non-Bahrainis, non-Bahrainis taking care of Bahraini children aged below 21 and non-Bahraini heirs.
To this list, I would request the government to consider adding expatriates too, who live in accommodation that is less than 500 square feet – that would be your average two-bedroom home. Those living there would be in a below BD1,000 income bracket and exempting them from the new utility tariff would be a great help.
In these belt-tightening times, it is natural for governments to look for ways to cut subsidies and to do so within the structure of the state’s support system for citizens. However, in countries of the GCC, the population is made up of a big percentage of expatriates – in fact, some countries have more expats than nationals, which is an elephant in the room that is hidden in the statistics. These expats work alongside nationals to keep these countries running and prosperous. Is it correct then to draw up plans for increasing prices on essentials like utilities and make expats alone bear the major brunt of the increase?
And while we are at it, government must remove the VAT on utilities. Electricity and water on tap are not luxury services but essentials for civilised living. Five per cent on a BD100 bill may seem paltry but government and MPs who can help refine the charges must remember that it is part of the overall price increase scenario and will make a big difference if eliminated.
The coping mechanism stretches beyond the installation of power and water-saving devices and the switching off of unwanted lights – people are actually moving house to stay ahead of the utilities cost increase. If you live in a villa with even a slightly larger-than-bath-tub size swimming pool, you can expect a bill of more than BD350 for utilities alone. It makes sense then, to move to an apartment complex where the extras like a pool and gym are part of the deal.
Over the past month, we have seen people move from independent villas to apartments, saying that they were actually paying close to half their rental amount in utility bills alone, even though they were empty-nesters rattling around as a twosome in a large house and very aware of saving power and water.
Meanwhile, spending patterns in Bahrain have definitely seen a shake-down with families trying to squeeze their weekly expenses within the VAT-free zone of basic essentials. A supermarket owner told me he was surprised when their offer of bags of onions at 5pc less than market price saw customers driving from Riffa to Muharraq to avail the deal.
Back to my grouse against VAT on utilities: If food essentials like rice, flour, sugar, meat can be made VAT-free for all, why not electricity and water? Let’s not be discriminatory there.