Rogue traders who resort to price gouging following the introduction of revised VAT rates have been warned of legal action.
The Industry, Commerce and Tourism Ministry yesterday vowed zero tolerance against businesses that increased the prices of products, including food items, that are exempt from the 10 per cent Value Added Tax (VAT).
The levy was doubled from five per cent to 10pc starting Saturday with inspectors immediately fanning out across the nation to catch out and punish the violators.
Meanwhile, six more shops and two restaurants were shut down for illegally increasing the prices of their products.
In a statement yesterday, the ministry said its inspectors had closed down six branches of an unnamed store that has branches in Tubli, Salmaniya, Saar, Arad, Galali and Riffa, and two restaurant branches in Hidd and Hamad Town.
“The action was taken upon receiving numerous complaints from consumers about the unjustified hike in food prices,” said the statement.
“The ministry will not hesitate to take legal action against anyone taking advantage of the new VAT rates to increase the prices of products that are made using VAT-exempt ingredients.”
An inspector checks the price of products during a visit
The ministry explained that those who take advantage of the current extraordinary circumstances are punishable under the Consumer Protection Law.
There have been several online reactions from the public to the 10pc VAT increase with some restaurants raising the price of Bahrain’s popular hot beverage – karak tea – by 50pc from 100 fils to 150 fils.
The GDN reported yesterday that the ministry warned retailers not to increase prices of essential food items in an unjustifiable manner.
Eight karak shops that inflated the tea prices were shut down.
The ministry urged the public to report violations on 17111346, 17111252 or 17111278 or through Tawasul, inspection@moic.gov.bh or the hotline 80008001.
Ninety-four basic food items and more than 1,800 government services are not subjected to VAT.
The doubling of VAT is part of Bahrain’s Fiscal Balance Programme to improve the state of the country’s public finance.
The government is expected to net up to BD490 million through full VAT implementation, though a conservative estimate of VAT revenues for 2022 has been pegged at BD288m.
This comes as the government aims to reduce the total deficit expected for 2022 from BD1.112 billion to BD823.528m.
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