MPs’ approval needed to implement VAT: Minister
Manama : The approval of MPs must be obtained ahead of the implementation of Value Added Tax (VAT) in the Kingdom, Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa has said.
In his reply to MP Isa Al Kooheji’s queries about the details of unified GCC VAT agreement and the GCC’s unified agreement on selective taxation, the minister assured that the new tax will be reviewed with both the House of Representatives and Shura Council.
“The agreement signed with fellow GCC states contains general frameworks and basic principles of the tax system, while leaving each country free to design the appropriate tax system in the domestic sectors,” the minister mentioned in his reply, adding that “it should not affect intra-GCC trade”.
He also stressed in his reply that “Finance Ministry is keen to ensure that all steps and measures are taken to adopt domestic law and value added tax policy, including collection and the source thereof, are among the best practices.
“Presenting it to the Legislative Authority on the constitutional and legal aspects is among these arrangements,” he the minister added.
As reported earlier, Shaikh Ahmed signed the agreement last February.
He affirmed in a statement issued then that “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”.
He also said that the GCC unified VAT and the GCC’s unified agreements on selective taxation are not income taxes and that they will be applied to goods and services at a rate of five percent, and will not include basic food items, medicines and medical supplies”.
The minister’s replies will be discussed before the House of Representatives during its upcoming regular meeting on Tuesday.
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