Court to announce verdict on EWA case in June

The Second Supreme Civilian Court of Appeal will announce its decision on an appeal filed by a Bahraini lawyer against the Electricity and Water Authority (EWA) on June 25. The appeal disputes a verdict issued by the High Administrative Court, on February 26 this year, rejecting a lawsuit filed against EWA by Bahraini Lawyer Mohammed Al Thawadi.

The lawsuit claimed that authority’s decision to impose Value Added Tax (VAT) on subscribers, by the beginning of this year, is unconstitutional. The appeal demands to scrap of an EWA decision to impose taxes on subscribers. The lawyer argued that the decision is unconstitutional, claiming that Articles 15 and 17 of the Constitution of Bahrain stipulate that taxes should only be imposed through legislation.

Al Thawadi accused EWA of not adhering to the Unified GCC VAT Agreement saying: “Article 29 did not stipulate the imposition of taxes on electricity supply services, but on the contrary, it gave each state the right to exempt some sectors following the local law.”

“Additionally, Article 30 expressly stipulated the exemption of government bodies from paying taxes, and therefore it is not permissible for the authority to collect taxes,” the lawyer told the court. EWA was represented by the State Cases Authority, which claimed that it has the right to impose VAT on the services it provides, as it is not a sovereign authority that solely provides them.

The lawyer demanded a clarification from the Ministry of Industry, Commerce and Tourism to confirm “if commercial establishments are permitted to provide electricity and water supplies in the Kingdom and the conditions required to obtain such a permit.”