MPs are set to debate and vote on a key amendment to the GCC Unified Selective Tax Agreement, in a move aimed at modernising excise tax rules and strengthening regional economic integration.
The amendment, signed on June 1, 2025 and attached to Decree No (22) of 2026, revises core provisions of the original GCC excise tax framework, including how tax is calculated, defined, and administered across member states.
The financial and economic affairs committee said the reform reflects both technical tax updates and a broader shift towards more flexible and health-conscious fiscal policy, particularly in relation to sugar-sweetened beverages.
Committee chairman MP Ahmed Al Salloom said the changes are part of a wider effort to ensure Bahrain’s tax framework remains aligned with evolving regional and international standards.
“This amendment enhances the efficiency of the GCC tax system while ensuring consistency across member states,” he said. “It also provides the necessary flexibility for governments to respond to public health priorities and economic developments.”
At the heart of the amendment is a revised mechanism for calculating excise tax. Under the new framework, GCC states will have the authority to apply tax either as a percentage of value, a fixed amount per unit, or a hybrid model combining both methods.
The agreement also clarifies that the retail price used for tax calculation will exclude both value-added tax (VAT) and excise tax itself, a technical adjustment intended to improve pricing transparency and consistency.
Mr Al Salloom stressed that the update is not merely administrative, but strategic in nature.
“We are moving toward a more advanced and adaptable tax structure that supports economic integration within the GCC while allowing each state to tailor implementation based on its national priorities,” he said.
One of the most notable policy shifts involves sweetened beverages, where taxation will increasingly be linked to sugar content rather than a fixed percentage model. According to the Finance and National Economy Ministry and the National Bureau for Revenue, this aligns with World Health Organisation recommendations aimed at reducing sugar consumption and improving public health outcomes.
Officials also confirmed that member states will now have greater autonomy in determining payment timelines and procedures for excise tax collection, giving governments more control over domestic implementation.
The committee report highlighted that Bahrain has been part of the GCC Unified Selective Tax Agreement since 2017, alongside broader commitments to regional tax co-ordination and fiscal harmonisation. The latest amendment updates Articles 1, 3, 6, and 16 of the agreement.
Mr Al Salloom said the reform strengthens Bahrain’s position within the GCC’s evolving economic framework.
“Harmonising tax policies across the GCC is essential for ensuring fair competition, reducing market distortions, and supporting long-term economic stability,” he said.
The committee also noted that the amendment complements ongoing national legislative adjustments, including alignment with Bahrain’s domestic excise tax law, to ensure full legal and operational consistency.
The ministry confirmed that implementation will require updates to national procedures, particularly regarding sweetened beverages, and co-ordination with relevant authorities including the Central Bank of Bahrain (CBB) and the National Bureau for Revenue.
Officials added that the revised framework is expected to support both fiscal sustainability and public health objectives, while maintaining Bahrain’s compliance with international best practices.
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