More mutterings about tax in the Gulf, this time from Bahrain. Khalifa Al Dhahrani, speaker of the Bahrain Parliament called for levying taxes on profits of foreign commercial institutions. As usual in these things he did not specify the tax rate or suggest a date for applying the new regime.
“Bahrain has limited sources of income and relies heavily on oil to fund its spending. Now it needs to diversify its sources, expand its financial assets and preserve the rights of the future generations,” says Al Dhahrani, reported in Gulf News. “It is only fair that foreign investors should contribute to the expenses by paying taxes.”
So what’s stopping them? Gulf countries seem to be able to command the building of roads, but new planes and construct office blocks, why can’t they introduce a tax system? If the idea is that tax revenues will be used to pay for infrastructure and services that will benefit the wider economy, where is the problem in that? Who’s complaining?
It seems no one is prepared to grasp the nettle. They shouldn’t worry. Business is not sold only on the idea of a tax-free environment. Ease of doing business, a deep pool of talent, good infrastructure, long term stability…all of these rank highly. Maybe Bahrain needs to just get on with it – and introduce the best, most equitable, most accountable tax system the world has seen.
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