Revenue booster
Manama : A new parliamentary proposal seeks imposing taxes on companies making an annual net profit of BD500,000. The move is aimed at adding more revenues to the state exchequer, according to MP Hamad Al Dossary, who moved the legislative proposal.
“A five per cent tax should be imposed on the annual net profit of companies that make BD0.5 million or more a year,” said Al Dossary, who also chairs the Public Utilities and Environment Committee in the House of Representatives, adding the measure would add a minimum of BD25m to the State budget.
“Commercial, Islamic and international banks, and insurance companies will be included in the proposal,” said Al Dossary.
“The proposal stipulates adding an article to Law 21 of 2001 with regards to commercial companies. The article would instruct to impose a 5 per cent tax on the annual net profit of commercial companies making more than BD500,000 a year. A recent study has showed that around 40pc of the companies in Bahrain achieve this net profit figure,” Al Dossary explained.
The lawmaker mentioned that a 20pc tax is imposed in Saudi Arabia on commercial companies making SR1 million (BD100,000) a year. He also said that a similar tax is implemented in the US and India.
“The proposal targets big companies working in the financial sector. These establishments enjoyed a tax-free work environment in Bahrain for decades. The proposal is a means to diversify the State revenues and would benefit local economy,” Al Dossary added.
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