New tax from early 2018

Manama : The new excise tax will come in to force from early 2018, Minister of Finance, Shaikh Ahmed bin Mohammed Al Khalifa announced yesterday.

The tax rate, as per Excise Tax on Selected Items Law, would be 100 per cent for tobacco and energy drinks, and 50 per cent for soft drinks.

The minister’s announcement follows the promulgation of Law No (39) on the Ratification of the GCC Unified Excise Tax Agreement and Law No (40) on excise duty.

The application of the excise tax in Bahrain comes within the GCC Supreme Council resolution in its 36th session, Riyadh, December 2015, authorising the Financial and Economic Co-operation Committee to complete elements required in this respect. 

The resolution was followed by the signing of the agreement by member states of the group in November 2016, and eventually the Supreme Council resolution in its 37th session, Bahrain, December 2016, authorising the committee to set up a time frame for the application.

The Finance Ministry has launched a new section covering all aspects of the new tax on its official website https://www.mof.gov.bh. 

The excise tax comes as an incentive for the consumption of healthy goods, limiting the use of products with a negative impact on both health and environment. 

The revenue from the new excise tax will also enable the government to proceed with its development programmes and contribute much to fill the revenue and expenditure gap in the national budget.