Government tightens noose around tax evaders

Manama : In a bid to curb tax evasion, the Government of Bahrain has decided to give cash rewards of up to BD10,000 to those who report such irregularities to the authorities here. 

“Those who report tax evasion will be paid 2.5 percent of the fine imposed or a maximum of BD10,000 in cash,” states Law 40 of 2017 for selective tax.

Article 50 of the newly implemented law states that the Finance Ministry grants cash rewards to “anyone who help detect violations and crimes that result in the collection of taxes or fines.”  The reward rule, however, excludes ministry employees. 

The order issued on 28 December 2017, and posted on the official website of the Legislation and Legal Opinion Commission, includes 51 articles tackling the implementation of excise taxes.

It also warns that those who fail to submit tax statements or pay the fee within the deadline will be fined 5pc to 25pc of the overall value of the excise tax, in addition to the fee payment.

The law also stipulates a maximum of BD5,000 fine for violations including preventing the employees of the Ministry from performing their duties or refusing to supply the required information. 

For repeating the violation, within three years, the authorities may double the administrative fine and/or revoke the license. Under the same law, violators convicted of tax evasion will be jailed from one month to one year and/or fined the equivalent of the imposed tax. 

Proceeds will go towards boosting the state revenues and supporting the Government to continue implementing development programmes.  

Diplomats exempted

Article 36 of the law excludes diplomats, consulates, international organisations, approved heads and representatives of diplomatic corps in the Kingdom from paying the selective tax. 

The article also places certain conditions for exemption, which includes equal treatment of Bahraini citizens in the countries of the diplomats.

The Ministry, however, warns that the exemption will be invalid if the imported goods are not used for a personal or official purpose and for failing to provide necessary documents regarding its destination.  

The exemption, according to Article 37 of the same law, is also valid for those travelling to Bahrain, provided the goods are not used for commercial purposes.

DT News earlier reported that beginning last Saturday 100pc tax will be imposed on tobacco and energy drinks, while soft drinks will receive 50pc tax. The move forms part of a unified GCC agreement to enhance revenue and to encourage citizens to choose healthy habits.