Ministers oppose fixed state firm levy

TDT | Manama

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Ministers pushed back against a draft law to fix the share of state-owned company profits paid into the state budget. They said they support the idea of public firms contributing to the treasury but have concerns about implementing a rigid legal rate.

Officials argued that tying the payment to a fixed percentage in law could create problems during market fluctuations, making it difficult for companies to adjust to changing economic conditions.

Minister of Cabinet Affairs, His Excellency Hamad Al Malki, said the government’s dispute was with the method in the bill, not the main idea behind it.

Budget

He said there is already an agreed way for government-owned companies to pay into the general budget during preparation of the state budget every two years, with the legislature taking part in that process.

The Minister said a fixed share written into law would not take enough account of the ups and downs faced by companies and the way results change from one year to the next.

He said the current way allows a set amount to be agreed after looking at trading conditions and company performance, and added that it is reviewed from time to time with the legislative authority involved.

Mechanism

“The government agrees with the principle of state-owned companies contributing to the general budget of the state,” H.E. Al Malki said. “But we differ with the draft law in the mechanism proposed.”

He said fixing a share of net profit in law would hurt company growth plans and would also make it harder for the Ministry of Finance and National Economy to work out the budget with precision.

“Setting a fixed percentage of companies’ net profits would have a negative effect on their expansion plans,” he said, adding that it would also affect the ministry’s ability to determine budget figures accurately.

H.E. Al Malki said Mumtalakat Holding Company has paid BD240 million into the state budget since 2017.

Sum

He said the sum began at BD10 million in 2017, rose over time and reached BD40 million in 2024, with another BD40 million paid in 2025.

Oil and Environment Minister, H.E. Mohammed bin Daina, said state-owned firms already pass through layers of financial review and legal scrutiny.

He said each board of directors draws up its company’s budget, which is then approved by the board, checked by internal auditors and audited by outside auditors before going to the shareholder, the Ministry of Finance and National Economy, for approval.

“Each board of directors is responsible for setting the company’s budget,” H.E. Bin Daina said. “The budget is approved by the board of directors, and there are internal auditors for all company accounts, audited by external auditors.”

He said company accounts also fall under the Companies Law and that all accounts are audited.