Public and private sectors in Bahrain not yet ready for VAT, says BisB
Chief Executive Officer of Bahrain Islamic Bank (BisB), Hassan Jarrar, points out that government and private sector insitutions are currently unready for the implementation of value added taxes (VAT) due to lack of clarity.
In a report published by local daily, Al Watan, Hassan Jarrar, CEO of BiSB was reported to have highlighted that that official government institutions and private sector institutions are not yet ready to implement VAT because of the lack of clarity of the mechanism and correct calculation and application of the regulation. He expects the implementation to be postponed until all matters related to them are clarified.
According to the report, Jarrar said in a press statement that Islamic banks are fully prepared for this process, but do not know how they will be calculated for customers—whether through the bank directly or by providing them with financial statements.
Jarrar’s statement was further confirmed in another statement submitted to the Bahrain Bourse on the matter.
IN the Al Watan report, Jarrar said that VAT would not affect the operations and performance of banks as a preferential tax to the end consumer, but the effect would be when the purchasing power of individuals declined, which would affect all institutions in the market if it happened.
Jarrar highlighted that BisB has appointed a consulting firm to design a full bank programme to apply the tax and avoid any particular effects. At the same time, VAT does not necessarily have to reduce the purchasing power of individuals, as well as any effect on loan interest.