Friday 22 October 2021

Bahrain mulls change in VAT rate to support economy

MANAMA, 25 days ago

Bahrain is considering several options to support the financial and economic recovery and to maintain social support for eligible citizens, including adjusting the rate of the value-added tax (VAT), it was revealed at a key meeting. 
Government ministers attending a joint meeting of the legislative and executive branches noted that the best option is always which has the minimum effect on citizens, especially those with limited income. They stressed keenness to maintain the exclusion of 49 basic food commodities from VAT, in addition to basic services and 1,400 government services, said a Bahrain News Agency report.
The joint meeting was chaired by Speaker of the Representatives Council Fawzia bint Abdullah Zainal, in the presence of Shura Council Chairman Ali bin Saleh Al Saleh, Finance Minister Shaikh Salman bin Khalifa Al Khalifa, Minister of Labour and Social Development Jamil bin Mohammed Ali Humaidan, Minister of Parliament Affairs Ghanim bin Fadhel Al Buainin, Minister of Industry, Commerce and Tourism Zayed bin Rashid Al Zayani, Shura Council First Deputy Chairman Jamal Fakhro, Second Deputy Chairman Jamila Salman, Representatives Council First Deputy Speaker Abdulnabi Salman Ahmed, Second Deputy Speaker Ali Zayed and Heads and members of the Shura and Representatives Councils’ Financial and Economic Committees, it said.
The meeting reviewed plans and initiatives related to financial and economic recovery after the coronavirus (Covid-19) pandemic. 
The government team stressed that Bahrain, in line with the directives of His Majesty King Hamad bin Isa Al Khalifa, has prioritised citizens’ health in all stages of dealing with the pandemic which faced the whole world. They said the efforts were focused first on protecting the health of citizens and residents, combat the virus and preserve national achievements. Then, they added, the kingdom took steps to support the national economy and the private sector, maintain economic growth, create quality opportunities for citizens, protect jobs and ensure stability of the labour market.
The government team pointed out the launch of the financial and economic package to maintain continuity of the state’s programmes to achieve sustainable development and weather the economic impact of the pandemic on the private sector. They also pointed out the initiatives taken to support citizens and alleviate the repercussions of the pandemic on them, in line with the directives of His Majesty the King and under the follow-up of the government led by HRH Prince Salman bin Hamad Al Khalifa, the Crown Prince and Prime Minister.  
The government team clarified that the results achieved until February 2020 of the Fiscal Balance Programme to balance government expenditures and revenues exceeded the interim goals set. They said due to the repercussions of the coronavirus pandemic on the world and the economic situation, in general, those results did not continue, which is what prompts at the current stage to adopt initiatives to protect the society through economic recovery, enhancing financial stability and putting the fiscal balance programme on track to achieve its goals.  
They said to avoid any direct impact on citizens, the goal of the fiscal balance programme will be modified to 2024, said the report.
The Minister of Finance and National Economy pointed out the government’s adherence to the principles adopted in achieving the goals of the fiscal balance programme. He pointed out the steps taken by the government in this regard such as rationalising and boosting the competence of expenditure, reducing the operational ones, maintaining social support for eligible citizens, ensuring continuous provision of good quality services for citizens and continuing the fiscal balance programme according to its goals through achieving economic recovery during the next phase.
The Minister stressed that priority in the next phase will be given to the importance of the national economic recovery through implementation of initiatives that are consistent with the current requirements to bring the growth rates back to their aspired levels. He praised the one-team spirit in facing challenges, stressing keenness on putting the supreme national interest above any other consideration.
The Speaker praised the constructive cooperation between the government and the legislative branch to serve citizens. She hailed keenness of the government to inform the legislative branch about future plans and projects and their impact on the community. She stressed that the meeting reflects keenness of the legislative and executive branches to maintain continuous coordination and cooperation to ensure success of plans and initiatives aimed at achieving the goals of the Economic Vision 2030.
The Shura Council Chairman stressed the positive economic indicators of Bahrain over the past eight months of 2021. He said the results, parallel to the levels recorded in 2019, before the global spread of the coronavirus pandemic, affirm the Kingdom’s financial stability and excellence in implementing policies to achieve sustainability of the national economy, the report said. 


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