Bahrain to Hike VAT After Saudi Arabia in Bid to Cut Deficit
- Smallest Gulf economy will raise the tax to 10% from 5%
- Bahrain had $10 billion bailout from neighbors in 2018
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Bahrain plans to double its value-added tax to 10%, the Gulf’s highest rate after Saudi Arabia, in a bid to boost state revenue and curb one of the region’s widest budget deficits.
The Gulf’s smallest economy is seeking ways to cut spending and bring its budget back into balance by 2024, a delay to the previous target, without undermining a fragile recovery, an official close to the government told Bloomberg News. It isn’t clear when the higher VAT rate will be implemented.