Bahrain: A Monthly tax paid by businesses for each expatriate worker they employ could be halved under an urgent proposal that will be discussed in parliament this week.
The Labour Market Regulatory Authority (LMRA) imposes a BD10 monthly fee on employers who have more than five foreign workers, while those with less than five have to pay BD5 per employee.
However, a parliamentary proposal, presented by the Nationalists Bloc, wants companies with less than 10 expats to pay BD5 per worker and those with more than 10 to pay BD10.
The LMRA has warned parliament that such a proposal violated its mechanism and interfered in powers granted by the Cabinet.
It also emphasised that the collected fees go towards Tamkeen’s coffers, which conducts training programmes for unemployed Bahrainis.
“The LMRA collected BD1.43 million at the end of 2012, BD9.9m in 2013 and BD38.8m last year,” said the LMRA in a written letter to parliament.
“Any change in collections would negatively affect the flow of funding to Tamkeen’s programmes, which will affect its plans and
proposed projects.”
However, the Bahrain Chamber of Commerce and Industry (BCCI) offered its support for the parliamentary proposal, saying it would help small and medium enterprises.
The tax has caused anger in the business community since its introduction in 2008.
“From April 2011 and until April 2012 the fees were halted to allow the market to recover and 63,000 private establishments benefited,” it said.
“But there are small and medium businesses that are new in operation and need such support to continue.
“A number of establishments are facing trouble making payments and helping them is something we will support, but we hope that Tamkeen’s revenues are not badly affected.”
MP Ahmed Qarrata, who is spearheading the proposal, told parliament’s services committee that small and medium businesses were facing massive financial burdens because they have to pay tax to different government bodies.
“Taking several fees doesn’t allow small and medium establishments to grow in the market and damages business,” he said.
“The current financial crisis across the world requires work to help support those establishments with plans to look into other ways to provide them with financial assistance.”
Meanwhile, parliament is set to vote on Tuesday on several proposals including opening Bahrain’s first government specialised centre for children suffering from autism, establishing a care centre for the mentally disabled, and moving all garages and workshops from residential to industrial areas.
mohammed@gdn.com.bh
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