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A 10 per cent duty and VAT have been imposed on ‘personal parcels’ valued above BD100.
Around the world, governments levy taxes and surcharges to meet obligations such as defence and public services, and it must be acknowledged that despite global economic challenges over the past three decades, Bahrain has largely shielded residents through prudent and balanced policies.
However, this new duty is likely to affect ordinary households, where living costs have steadily tightened over the past 10 to 15 years. Much of this strain, many would argue, stems not only from global factors but also from excessive profit margins. During the Covid-19 pandemic, for instance, a pack of face masks cost BD9.500, compared to around 400 fils today – raising concerns over how much traders may have benefited during a period of crisis.
Declining purchasing power is also reflected in everyday experiences. A restaurant worker once observed that fewer customers could afford full meals, with two people often sharing a single plate. Yet, within a short span, some businesses have expanded rapidly, opening multiple branches. This raises questions about profitability and pricing structures within the local market.
Similarly, retail spaces are often leased or booked well in advance, even before projects are completed, suggesting expectations of strong future profits despite current economic pressures on consumers.
The definition of ‘personal parcels’ itself also needs clarification. If such parcels are defined as those received in an individual’s name, there is a possibility that shipments could simply be routed through commercial registrations (CRs), which many families possess, thereby limiting the effectiveness of the policy.
Past regulatory ambiguities in other systems, such as the classification of ‘gift parcels’ under postal rules, demonstrate how outdated definitions can lead to unintended loopholes, especially in an era where private courier services dominate over traditional postal systems.
Online shopping has become an essential part of daily life for many families, particularly when price differences between local and international markets are significant. Everyday purchases such as clothing, household items or medical devices are often sourced from abroad at considerably lower prices, even after accounting for delivery costs. This disparity highlights the competitiveness challenge faced by local retailers.
Strengthening the national economy is a shared priority, particularly in light of recent regional developments. However, this requires carefully considered measures. Greater focus could be placed on improving efficiency and cost management within public services rather than on repeated spending on renovations or non-essential upgrades. Increased accountability and oversight in public expenditure would help ensure that resources are directed where they are most needed.
In this context, the idea of establishing a National Development Fund (NDF) could be explored as an alternative approach.
Contributions could be drawn from sectors with higher consumption or stronger revenue streams, such as new vehicle sales, fuel, tobacco products and service industries, while ensuring proper documentation and transparency. Such measures may offer a more sustainable way to support public finances without directly burdening essential consumer spending.
Finally, it may be useful to examine broader economic trends. In the past, residents travelling abroad often carried goods purchased locally, reflecting strong domestic retail appeal.
Today, the situation appears reversed, with many consumers sourcing products from outside Bahrain.
A closer study of regional market dynamics, cross-border shopping patterns and the impact of online commerce could help identify ways to revitalise local trade. Ensuring that pricing, quality and consumer confidence remain competitive will be key to strengthening the domestic economy while safeguarding the interests of residents.
Muhammad
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