A No to VAT Increase in Bahrain
Amidst the ongoing economic crisis due to Coronavirus, every country is trying hard to improve their economy by taking various steps. And one such step was taken by Saudi Arabia and that step was to increase the VAT to 15% from 5%, a whopping 10% increase to grow the income of the kingdom.
However, this step is not at all likely to be taken in Bahrain, as the authorities believe that any such step will have an adverse effect on businesses and consumers.
The experts also believe it is not a good step to increase taxes in such a situation. Currently, the GCC governments are providing stimulus to support businesses against Coronavirus and any increase in taxes will reverse the effect.
Currently, Bahrain is supporting individuals and companies through a comprehensive US$11.4 billion economic stimulus package. The package includes some vital measures like payment deferrals, rate deductions, moratorium on debt repayments, etc… And the government believes any increase in tax rates may result in deeper recession with increased inflation.
The experts have also same thinking that increase in VAT will have a negative impact on the economy. Experts believe that any increase in VAT will increase the cost of living while many people are struggling to cope up with the pay cut and loss of jobs due to the Covid-19.
So, there is a BIG NO TO VAT INCREASE IN BAHRAIN.