The Minister of Finance said in a meeting of the ministry yesterday that the Kingdom of Bahrain will be officially implementing VAT in in early October of this year.
A 5% VAT will be implemented on many types of goods and services in the Kingdom.However, health sector, education and transportation will be exempted from VAT.
VAT will be imposed on the following sectors:
- Water and electricity
- Traffic and licensing department,
- Real estate
- Construction and oil, which will be applied to fuels, including gasoline, diesel, electricity, and gas
- Modern Cars from the agencies
- Car rentals
- Luxury goods
- Mobile phones
- Clothes and watches
- Movement of sales and purchase in the markets
Tax will also be imposed on companies whose annual profits are upto 40 thousand dinars and more per annum and tax rate would be calculated accordingly.
The Ministry of Finance also said that a tax collection system will be established in the Kingdom of Bahrain and companies with an annual income of US $ 100,000 should be required to register their company.
According to economic studies, the Kingdom of Bahrain will benefit 500 million dinars from the state treasury, selective tax of 60 million dinars, and income tax of 750 million Dinars from companies, i.e. a total revenue up to 1.3 Billion dinars within one year.
These revenues from the VAT will be used for the establishment of a high network of infrastructure, which includes construction of roads, streets, and bridges. VAT will also contribute in the improvement of transport and communications, construction of hospitals, educational facilities and other services of the country.
Issued by the Ministry of Finance on Tuesday 09 January 2018 *.