GCC VAT deal signed

Manama : Bahrain will soon impose a five per cent tax on certain commodities as the Kingdom signed the unified GCC Value Added Tax (VAT) agreement and the GCC’s unified agreement on selective taxation yesterday.

Signed by Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa, the taxation will not include basic food items, medicines and medical supplies. The agreement would come into effect in all GCC countries simultaneously.

“The Kingdom of Bahrain will apply the conventions of the agreement after the completion of all the constitutional and legal procedures, and after the issuance of the necessary legislation by the Legislative Authority (Parliament and Shura Councils),” the minister announced in a statement issued yesterday.

“The GCC’s unified VAT agreement and the GCC’s unified agreement on selective taxation are not income taxes. They will be applied to goods and services at a rate of five per cent, and will not include basic food items, medicines and medical supplies,” Shaikh Ahmed’s statement added.The ministry’s Undersecretary Arif Khamis later announced that “the taxes will not affect low-income citizens and will exclude 90 commodities”.

The undersecretary’s statements came during a press conference held by Information Affairs Minister Ali Al Rumaihi, who added that “the VAT percentage agreed upon among GCC states is among the lowest in the world and is applied in more than 150 states.” The agreement is expected to come into effect by 2018.