Bahrain’s approach on Value-Added-Tax (VAT) revenues is based on transparency, clarity and continuous engagement with taxpayers, Finance and National Economy Minister Shaikh Salman bin Khalifa Al Khalifa has said.
In a written response to Parliament’s services committee vice-chairman Abdulwahid Qarata, Shaikh Salman disclosed that VAT revenues have generated more than BD1.7 billion for the Treasury since 2022
The minister explained that VAT management and collection are carried out through an integrated digital platform that allows businesses to complete registration, filing of tax returns and payment of dues electronically, reducing manual intervention and administrative errors.
To support compliance, the Bureau publishes detailed guidance manuals, practical instructions and frequently asked questions, which are regularly updated to reflect changes in practice and interpretation.
“Providing clear guidance enables VAT payers to fully understand their obligations, which in turn strengthens voluntary compliance,” Shaikh Salman said.
On enforcement, he said the Bureau has a dedicated compliance and collections department responsible for monitoring payments, following up on outstanding dues and applying administrative procedures in line with the VAT Law and its executive regulations.
Each VAT-registered company is assigned a dedicated account manager to ensure direct communication, while a specialised support team and 24-hour call centre provide continuous assistance to taxpayers.
“All VAT revenues collected are deposited directly into the State’s General Account through approved payment channels,” the minister said.
“Specialist teams also prepare monthly reports on uncollected revenues, which are reviewed in co-ordination with the ministry to strengthen oversight and collection controls.”
Shaikh Salman noted that VAT declarations submitted by registered entities are subject to periodic risk-based reviews, supported by audit procedures that examine accounting records, invoices, contracts and electronic systems.
If discrepancies are found, declarations are corrected and penalties are imposed in accordance with the law.
He clarified, however, that monitoring price increases in the market falls outside the NRA’s mandate.
Addressing public concerns about the impact of VAT on living costs, the minister stressed that Bahrain has adopted a consumer-friendly VAT framework, with extensive zero-rating and exemptions to protect households.
“Many essential goods and services are either zero-rated or exempt from VAT, including healthcare, medicines, education, domestic and international transport, new building construction and 94 basic food items,” he said.
In addition, sales and rentals of residential and commercial real estate, government services provided in a sovereign capacity, and basic financial services are exempt, while oil and natural gas remain subject to the standard 10pc rate.
“These measures have played a key role in shielding Bahraini families from increases in the cost of essential goods and services,” Shaikh Salman said.
He reaffirmed that VAT policies are kept under continuous review, taking into account economic, social and market developments, to ensure the system remains balanced, transparent and supportive of sustainable public finances.
mohammed@gdnmedia.bh
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