Vote on Luxury Goods Tax Changes

TDT | Manama

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The Shura Council will next consider a Gulf excise tax amendment that would let GCC states charge harmful and luxury goods by value, by unit, or through both methods together.

The Financial and Economic Affairs Committee has recommended approval of the draft law ratifying an annex to the GCC Unified Excise Tax Agreement. The bill, attached to Decree No. 22 of 2026, has already passed Parliament.

Bahrain ratified the agreement under Law No. 39 of 2017. The new annex, signed on 1 June 2025, changes how excise tax can be calculated across the Gulf.

Under the amendment, each member state could calculate the tax as a percentage of the value of excise goods, as a fixed sum per unit, or as both. The tax applies to goods harmful to human health and the environment, along with luxury goods, according to a list drawn up by the GCC ministerial committee. That committee may change the list.

The draft law consists of two articles. The first ratifies the annex to the GCC agreement. The second deals with implementation.

The annex replaces the definition of ‘value of excise goods’ in Article 1 of the agreement and amends Articles 3, 6 and 16.

It states that the tax due may be based on the retail sale price of the goods. This would be either the price named by the importer or producer, or the standard price list agreed from time to time by GCC tax bodies, with the higher figure used.

The committee said this yardstick was workable and would give the body applying the tax a clearer way to value goods and calculate what is owed.

Each GCC state would also be left to decide the time limits, terms and rules for paying the tax, in line with its own regulatory policy. The report said this would take account of the agreement’s provisions on supplies of goods with transport, supplies of gas, oil, water and electricity, and the place where services are supplied.