Bahraini Contractors Object To Expatriate Levy

by Lorys Charalambous, Tax-News.com, Cyprus

01 April 2009

Bahraini business leaders joined in protest against the government’s recently introduced expatriate tax on March 22. Under the government’s levy, Bahraini employers are required to pay a BHD10 (USD26.5) monthly tax for each foreign worker they employ.

The tax, introduced in July 2008, aimed at improving the employment prospects for the country’s domestic workforce. According to government statistics around a third of the country’s workforce is made up of expatriate employees, predominantly of Indian origin.

Bahraini construction companies, headed by the Bahrain Contractors Association (BCA), are petitioning for the removal of the tax, stating that the global recession is causing enough problems for their balance sheets without the added pressure of the new tax.

The Labor Market Regulatory Authority, the governing body in charge of the enforcement of the tax, has agreed to put the case forward but have first called for the BCA to substantiate its claims, one LMRA official stated:

“If they give us concrete information showing the losses they have incurred we will submit the details to our board of directors." Explaining that the tax couldn't be directly altered by the LMRA, he added: "By levying the monthly fee on employment of foreign workers, we are implementing a decision made by the legislative authorities.”

Recommended