Bahrain first introduced value-added tax (VAT) in 2019, imposing a 5% rate on all goods and services. Earlier this year it doubled the rate to 10%. The government claims that the aim of this increase is to address its rising fiscal deficit.
The VAT jump comes at a time when “more than 51% of Bahrainis live below the poverty line," with monthly salaries of only 200-400 BHD (530-1,000 USD), according to economist Akbar Jafari. In this vein, the Nationalist Democratic Assembly has stated that about half the population (47%) depend on some form of financial aid, which is “a strong indicator of the level of poverty in Bahrain.”
Khalil Buhazaa, a writer and researcher on labor affairs, echoed Jafari’s points in an interview with Amwaj.media. He asserted that “the lower classes and foreign workforce will bear the brunt of the VAT increase. The average wage of more than 70% of Bahrain's foreign workforce is less than 200 BHD (530 USD) per month,” rhetorically asking, “How will they be able to survive on that income?”...
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