REVENUES from value-added-tax (VAT) are continuing to offer the kingdom a vital economic boost, MPs were told.

It helped boost revenues by six per cent in 2023, after witnessing a staggering 122pc increase in revenues from VAT in 2022 when it was doubled from five to 10pc, Finance and National Economy Minister Shaikh Salman bin Khalifa Al Khalifa said during yesterday’s Parliament session.

“The revenues were BD583 million compared to BD547m in 2022 and BD247m in 2021,” he said in response to a question by public utilities and environment affairs committee vice-chairman MP Mohammed Al Bulooshi.

“We still have to go a long way in balancing the books,” said Shaikh Salman. “VAT is a vital source of non-oil revenue and the given BD583m preliminary figure for last year is just part of the closing financial statement that will be made available in the upcoming days,” he added.

“We continuously review the effect of VAT on basic commodities to ensure we limit the effect it may have on them.

“Around 100 basic commodities are exempted from VAT to offset any potential impact it may have on citizens, particularly those on a low-income.

“When VAT was doubled through consent with the legislative authority, it was accompanied with increases to anti-inflation social support payments as we tried to maintain people’s finances.”

He pointed out VAT was linked with all economic measures. “The country is witnessing strong tourism, trade and industrial movement and with it higher VAT revenues come accordingly,” said Shaikh Salman. “VAT is integral to the economic plan.”

Meanwhile, Shaikh Salman also said companies owed BD68,892 to the Social Insurance Organisation (SIO) and their government services had been suspended until payments were made.

He added that the SIO’s investments witnessed a 2.1pc increase in 2022, which changed in 2023 with 4.2pc gross profits.

“The SIO has BD130 million deposited in banks, while assets include 52 buildings and 33 plots,” said Shaikh Salman in response to a question by MP Abdulhakim Al Sheno on SIO affairs.

Shaikh Salman stressed commitment to continue pension payments to former MPs, Shura Council members, municipal councillors and Capital Trustees Board members who took up their roles before lifetime pensions ceased in 2018.

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