Audit, Tax and Advisory firm, KPMG in Bahrain, recently organized an online seminar under the theme “Bahrain VAT rate change” to discuss the anticipated VAT increase from 5% to 10%. The rate change is expected to take place starting from January 2022.
In September 2021, the Council of Ministers in Bahrain approved an increase in the standard rate of VAT from 5% to 10% with effect from 1 January 2022. This comes as part of fiscal reform efforts to re-stabilize the local economy which was impacted by Covid-19.
The event was attended by 270 tax and finance professionals in the local business community, who obtained valuable insights from KPMG in Bahrain’s Tax professionals on the implications of this change on their operations. Partner and Head of Tax and Corporate Services at KPMG in Bahrain, Mubeen Khadir, the keynote speaker, was joined by Omar Hisham, Tax and Corporate Services Senior Manager, Shashank Chandak and DaoHan Hung, Tax and Corporate Services Managers at KPMG in Bahrain.
The webinar focused on what companies need to do to get ready for the VAT rate change and ensure their teams’ readiness to deal their ongoing compliance obligations at the new rate. Mubeen Khadir commented “Having worked with many Saudi businesses last year preparing them for the VAT rate increase, we strongly recommend Bahrain businesses start preparing today. Businesses should review their existing contracts to assess the impact of the transitional rules and plan for changes to documentation templates, such as invoices, credit and debit notes. They also need to perform a gap assessment of the existing IT and accounting systems to examine their readiness for VAT rate change from the cut-off date. Also, they need to consider any immediate change to marketing/pricing strategies and communications with suppliers, customers.”
Omar Hisham also added “Businesses may have taken VAT costs less seriously as errors at 5% or the inability to claim input VAT may have not had a material impact on their finances. However, with the rate set to double, VAT should become a material consideration for most businesses - with VAT at 10%, errors and the inability to claim input VAT is likely to have a significant impact on businesses.”
The event was held today, 10 October 2021, as a virtual webinar. For more information and upcoming events, please contact Khalid Seyadi directly on kseyadi@kpmg.com.
