Mattar holding LMRA bills to pay the fees.
Bahrain SMEs 'on the verge of closure'
Manama, March 17, 2014
Thousands of small and medium enterprises (SMEs) in Bahrain are on the verge of closure, warned businessmen.
They say around 5,000 businesses are still struggling to stay afloat as they have not recovered from the financial downturn caused by the unrest in 2011, said a report in the Gulf Daily News (GDN), our sister publication.
Businessman Hisham Mattar, who is among those affected, predicted a "mass shutdown" of small companies within the next six months, adding that a mandatory tax on foreign workers was adding fuel to the fire.
Public and private sector companies have to pay the BD10 ($25.9) Labour Market Regulatory Authority (LMRA) fee for every expatriate they employ or BD5 if they hire less than five foreigners.
"Small and medium enterprises in Bahrain that constitute more than 85 per cent are bleeding because of the poor financial situation," he told the GDN yesterday.
"In another six months, you will see several establishments shutting down including those businessmen who have played active roles in the local economy for more than 20 years."
Mattar, who heads a committee of businessmen formed to oppose the LMRA fees, urged authorities to reconsider their decision to reintroduce the tax.
He said like other businessmen he has received several warning letters from the LMRA to pay the levy.
"All those who cannot pay the fees are in a fix as all their business transactions are frozen and work permits are cancelled," he added.
"Because of the situation we cannot even pay our staff, how will we pay the fees."
Last month, a group of businessmen led by Mattar submitted a letter of protest to parliament chairman Dr Khalifa Al Dhahrani.
"We have knocked on every door possible and now finally request a meeting with the Crown Prince to resolve this issue," said Mattar.
"It is difficult to put a number to the losses incurred by the SMEs which is in the millions, but if things continue like this with no proper solution then it is the end for us."
He said the committee will also follow up on a petition signed by 5,000 businessmen last year against the tax, which was submitted to His Royal Highness Prime Minister Prince Khalifa bin Salman Al Khalifa.
The LMRA said it would respond to the claims today.
The controversial fees were reintroduced in August last year after being suspended for 28 months to help businesses recover from financial losses caused by the unrest.
MPs then came up with a bill to scrap the fees in the low-income sector, but the Shura Council rejected it in December following a warning from LMRA chief executive Ausamah Al Absi, who claimed reducing the fees based on sectors would cause chaos and threaten the future of the labour market.
The GDN earlier reported that the Bahrain Independent Commission of Inquiry report stated that 97 per cent of local businesses were severely affected during the height of unrest in 2011 with 84.6 per cent reporting loss of income. - TradeArabia News Service