MPs Call for Halt to End-of-Service Benefit Deductions for Non-Bahrainis in Private Sector

TDT | Manama
Email : editor@newsofbahrain.com

Several MPs have submitted a motion calling for the suspension of a system that deducts end-of-service benefits from non-Bahraini employees in the private sector, according to the Daily Tribune.

This system requires employers to contribute to the Social Insurance Organisation (SIO) at a rate of 4.2% of the employee’s salary for the first three years, increasing to 8.4% thereafter.

Lawmakers behind the proposal argue in an accompanying memorandum that the system was introduced without prior consultation with the Bahrain Chamber of Commerce and Industry.

They claim the system has disrupted employers, exacerbating their already significant financial challenges. The MPs highlight that this issue is particularly detrimental to small and medium-sized enterprises (SMEs) and micro-businesses, which are struggling with a precarious financial situation.

The MPs noted that many SMEs are still grappling with financial obligations accrued during the COVID-19 pandemic, with some cases escalating to legal disputes.

They called for the formation of a joint committee with representatives from both the public and private sectors to address these concerns and identify workable solutions.

The lawmakers also stressed that the rising government fees and levies imposed on small businesses are compounding the financial strain on SMEs, pushing them further into unsustainable levels of debt.