BD600 Debate Deepens as Council Returns VAT Relief Proposal to Committee

TDT | Manama

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A draft law seeking to exempt low-income Bahrainis from Value Added Tax was referred back to committee after a heated debate during the Nineteenth Ordinary Session of the Fourth Annual Meeting of the Sixth Legislative Term.

The proposal, discussed extensively under the report of the Financial and Economic Affairs Committee, aimed to exempt citizens earning less than BD600 per month from VAT, invoking Article 15 of the Constitution.

MP Ahmed Abdulwahed Qarata questioned the absence of a clearly defined minimum living threshold, noting inconsistencies between figures cited by different government entities. MP Abdulnabi Salman Ahmed criticised the continued reliance on BD336 as a benchmark for minimum living standards, arguing that it no longer reflects economic realities.

MP Mohamed Al Maarafi emphasised that the constitutional text on exempting small incomes from taxation is clear and does not require reinterpretation. MP Basma Abdulkarim highlighted the daily struggles of families living on BD600 or less, pointing to rising housing, electricity and food costs.

MP Mahmood Merza Fardan raised legal questions regarding whether zero-rated VAT provisions benefit specific income groups or apply universally. MP Dr. Ali Al Nuaimi called for further economic assessment of the proposal’s fiscal implications.

MP Jameel Kazem Mahfoodh and MP Mahdi Abdulaziz Al Showaikh underlined the need to protect limited-income citizens from mounting financial pressures, while MP Khalid Saleh Buanaq demanded greater clarity on which goods are subject to VAT.

Despite strong support from several members, others cautioned against potential technical conflicts with the VAT framework and regional agreements.

The Council ultimately voted to return the draft law to committee for further review and legal refinement.