Parliamentary panel rejects Government tax bills in Bahrain

Manama : A parliamentary committee yesterday rejected bills that were “urgently” referred to it by the Government, introducing new taxes on certain products. The MPs feared that the bills would open the doors for imposing more levies on citizens.

The bills stipulated joining the GCC’s unified agreement on selective taxation and Value Added Tax (VAT).

It was rejected by the Financial and Economic Affairs Committee in the House of Representatives during its regular meeting yesterday.

The meeting was headed by the committee’s Deputy Head MP Jalal Kadhim, who told DT News yesterday that “the bills included several loopholes” and that “the committee wasn’t granted sufficient time to study them”.

MP Kadhim explained, “The bills were urgently referred to the House, giving the Committee less than two weeks to study, discuss or approve it.”

The legislator explained further, “Within the provisions of the bill, the concerned minister is granted jurisdictions to impose levies on products that are harmful to human health and the environment, without additional clarification. There are many products that are harmful to health and environment, such as cars and other commodities. This means that the concerned minister would impose taxes on these products in the future. More clarification and specification are required.”

As reported last month, the Cabinet passed the bills and referred them to the Legislative Authorities (House of Representatives and Shura Council) for further studying and approval on October 16.

The bills included imposing taxes on selective products that are harmful to health, including tobacco products (100 percent), carbonated drinks (50 pc) and energy drinks (100 pc).

“The increase of certain products’ prices would have a domino effect on other commodities”, MP Kadhim told  DT News yesterday.

“Nowadays, franchise and traditional restaurants offer carbonated drinks along with their meals. Imposing the taxes on the drinks would eventually raise the prices of meals,” MP Kadhim commented, adding, “These are regional agreements. We are unable to amend them. We either join or reject them, and the majority of committee members voted the bills as they form an additional financial burden on citizens.”

The committee’s rejection of the bills isn’t final, as the entire House will vote on its decision during the upcoming sessions. The results of the vote will be referred to the second legislative branch, Shura Council, before it would be returned to the Government.   

Last February, Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa signed the unified GCC VAT agreement and the GCC’s unified agreement on selective taxation, which was confirmed back then to not have any effect on the prices of basic food items, medicines and medical supplies.

The ministry also clarified that “these agreements aren’t income taxes and 90 commodities will be excluded”