Bahrain will double value-added tax (VAT) to 10 percent as it looks to boost revenues and rein in one of the Gulf’s widest budget deficits as the economy begins to recover from the pandemic, according to a Bloomberg report citing an unnamed official.
The Gulf country decided to raise VAT following a comprehensive spending and revenue review, the official told Bloomberg, as the government looks for ways to rebalance its finances without undermining an economy in recovery mode.
According to IMF estimates, Bahrain’s budget deficit will contract by half this year after lower oil prices and the coronavirus pandemic boosted it to a record 18 percent of economic output in 2020.
(Writing by Brinda Darasha; editing by Seban Scaria)
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