Bahrain approves draft VAT law

Bahrain approved a draft law that would introduce value-added tax (VAT) for the first time in the kingdom, according to a statement on the country’s official news agency.

The House of Representatives approved the GCC agreement to introduce VAT after a parliamentary session on Sunday.

The move came a few days after Saudi Arabia, the UAE, and Kuwait offered a $10 billion aid package to Bahrain to avoid the risk of a debt crisis.

The VAT bill is pending approval from the Parliament’s Upper House, which is also expected to hold a similar session later this week.

The move will make Bahrain the third GCC country to implement the region’s unified agreement on VAT, after Saudi Arabia and the UAE. VAT and changes to the pension system are part of efforts to repair state finances, which have been hit hard by low oil prices.