Manama: Bahrain has decided to double the Value Added Tax (VAT) from 5 to 10%. The parliament in the country has approved the proposal for this. Ahmed Al Salloom, member of parliament and chairman of the Financial and Economic Affairs Committee said that the new proposal is a ‘critical pillar of the kingdom’s fiscal balance programme’.
The successful approval of the VAT increase by parliament is a critical milestone within our economic recovery plans and our aim of achieving a balanced budget by 2024′ said the ministry of finance in a statement.
The new VAT structure will come into force from next year. As per the reports of global rating agency S&P Global Ratings, the new VAT structure will contribute receipts of about 3% of gross domestic product in the next few years, up from about 1.7%.