Implementing the increase to Value-Added-Tax (VAT) at this time was crucial to avoid a potential devaluation of the national currency, according to a top minister.
In remarks at the AmCham address yesterday, Industry, Commerce and Tourism Minister Zayed Alzayani acknowledged the added pressure VAT placed on consumers and businesses, but noted that Bahrain had the highest number of exemptions to the tax in the GCC.
Mr Alzayani cited the national debt and dropping state revenues as the reasons the tax is necessary, and said the kingdom had already deferred the increase for several years.
In 2018, GCC countries had agreed to introduce a five per cent VAT to counter a drop in oil prices and Saudi Arabia introduced 15pc VAT in 2020.
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