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After approving the 10% tax will the Saudis stop their trip to Bahrain’s markets?

After the Bahraini Cabinet approved a draft law amending the value-added tax, and increasing it from 5% currently to 10% starting in January 2022, does this affect the demand of Saudis – specifically residents of the Eastern Province – on Bahraini markets, after the percentage of Saudi shoppers in Bahrain exceeded to more than 60%?

The Kingdom of Bahrain includes a large number of popular markets desired by Saudis, specifically in the capital Manama and the city of Muharraq; Where prices were very few compared to the markets of the eastern region, reaching more than 70%; However, after the high value-added ratio, these markets may be devoid of Saudis by a large percentage, so the difference of 5% does not give the Bahraini markets the trouble.

When asked “previously” some of the pioneers of Bahrain’s markets from the residents of the Eastern Province, they said: The Bahraini markets are crowded with Saudi families throughout the year, specifically during holidays and the blessed month of Ramadan and when returning to schools; The prices were one of the main factors to attract the Saudi shopper, in addition to the presence of international brands that are not found in the markets of the Eastern Province, not to mention the close distance between the Kingdom of Bahrain and the Eastern Province, which is the main reason and factor for that.

They added: “The size of the purchasing power of the Saudi shopper in the Bahrain markets is superior to the rest of the shoppers in the Gulf countries. The value added is currently increased to 10%.

The Bahraini Cabinet has approved a draft law amending value added tax, and increasing it from the current 5% to 10% starting in January 2022, and the council referred the draft law to amend value added tax to Parliament for approval.

The government of Bahrain said in a statement, last Monday: that the annual growth of real GDP amounted to 5.7% in the second quarter of 2021, and the nominal GDP grew by 20.7% on an annual basis in the period from April to June; While the non-oil GDP grew by 12.8%; According to a cabinet statement.