Bahrain Doubles VAT Rate from 5% to 10%, Effective from 1st January 2022

The Blue dot Team

UPDATE 16/12/2021

The parliament of the Kingdom of Bahrain has approved a government proposal to increase the VAT rate from the current 5% to 10%, which will be effective from 1st January 2022.

The increase is part of the government’s efforts to balance the Kingdom’s public finances through expenditure rationalization measures and revenue enhancement measures.


Update of the Fiscal Balance Program

UPDATE 29/09/2021

The Bahraini Council of Ministers has approved a number of amendments to the VAT law, including an increase of the VAT rate. A parliamentary source confirmed to the media that the government’s plan is to increase the rate from 5%, currently, to 10% in an attempt to increase public revenues and reduce the Budget deficit.

The draft law introducing the amendments was approved by the Council of Ministers on 27 September 2021 and transferred to the parliament for review and discussion.

The new rate, if enacted, will apply as of 1 January 2022.

Source: IBFD

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