Bahrain to hike VAT after Saudi Arabia in bid to cut deficit

Fiscal strain: A salesman waiting for customers outside his shop in Manama. Bahrain plans to double its value-added tax to 10% in a bid to boost revenue. — Reuters

MANAMA: Bahrain plans to double its value-added tax (VAT) 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.