Bahrain to roll out excise tax from Saturday

Manama : The prices of tobacco products, soft drinks and energy drinks will double as the Excise Tax on Selected Items Law will come into effect this Saturday, the Finance Ministry said yesterday.

The new levies include 100 per cent tax on tobacco products and 50 per cent on soft drinks, which were concerned as “harmful products” by finance ministries in fellow GCC countries. This comes at a time when Saudi Arabia and the United Arab Emirates already imposed the new taxation system, while Kuwait and Oman announced that they will postpone the decision until 2019.

“Bahrain will start levying the excise tax on specific harmful goods on December 30,” the ministry confirmed this in a statement issued here yesterday. “The Gulf Cooperation Council (GCC) summit which was held in Riyadh in 2015 agreed to implement the selective tax. The excise tax aims to encourage citizens to opt for healthy products, reduce the consumption of harmful goods, enhance social awareness and alleviate the financial burden resulting from the treatment of diseases,” the statement read.

The ministry’s Assistant Undersecretary for Public Revenues Development Rana Ibrahim Faqihi explained, “Under law 40 of 2017, traders wishing to import or produce harmful goods subjected to the excise tax are required to submit an application in this regard by January 15, 2018. The ministry will finalise the registration pending completion of terms and regulations stipulated in the law.” The official also said that “violations of excise tax law or tax evasion would incur administrative fines and criminal penalties”.

“Under the law, those who fail to submit tax statements to the Ministry or pay the required fee within the deadline would be fined 5 per cent to 25 per cent of the overall value of the excise tax, in addition to the payment of the fee. Violators who prevent the ministry’s employees from performing their duties, refuse to supply them with the required information or break the excise law provisions would be fined a maximum BD5,000,” Faqihi explained in the statement.