Lawmakers unanimously reject applying VAT on power, water

Members of the Parliament yesterday voted against the licensing of Electricity and Water Authority (EWA) for Value-Added Tax (VAT) collection. It was a unanimous decision seeking to exclude electricity and water services from the purview of VAT. The MPs criticised the government’s decision to allow EWA to collect VAT on its services.

They said that it would overburden the citizens who are already struggling to adjust with the increased expenses related to VAT implementation in various areas. The EWA, earlier this week had announced that electricity and water services would be subjected to VAT. The announcement confirmed that both electricity and water charges will be charged at a standard 5 per cent applicable from January 2019.

The move was heavily scrutinised with many calling for the decision to be overturned. MP Mohammed Buhamood said that applying VAT on electricity and water charges places a huge burden on the public. He said that EWA services must be exempted from VAT. Meanwhile, NBT has encouraged the public to make sure that shops clearly display their VAT registration certificate prior to paying the tax.

Consumers in the Kingdom have been urged to ensure that they don’t overpay for goods and services to businesses who may take advantage of the current confusion in the market and charge extra bucks for goods and services. Taking advantage of the existing confusion in the market, certain businesses may swindle the customers by charging extra and many customers are worried over being cheated in the name of VAT. The NBT stated that its call centre has successfully responded to over 1,000 VAT related queries per day through its hotline (8008001) and by email (vat@ mof.gov.bh) since the induction of the VAT on January 1, 2019.