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Wed 5 Feb 2014 02:26 PM

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Bahraini businessmen petition against expat tax

Employers sign a letter calling on the gov’t not to re-introduce a levy per expatriate employee

Bahraini businessmen petition against expat tax
(Getty Images - Photo for illustrative purpose only)

Bahraini businessmen are petitioning for a tax imposed per expatriate employee to be axed, claiming they are still struggling to recover from the economic crisis and unrest that has marred the kingdom since 2011.

Public and private companies operating in Bahrain are taxed BD10 ($26.50) for each foreigner they employ, or BD5 for less than five foreigners.

The levy was suspended for 28 months during the financial crisis but was reintroduced in August.

MPs had attempted to scrap the fee for low-income businesses but the proposal was rejected by the Shura Council in December, with Labour Market Regulatory Authority (LMRA) chief executive Ausamah Al Absi claiming it would threaten the future of the labour market.

Last month the LMRA gave businesses four weeks to pay the tax, warning expat visas would be cancelled.

In a letter of protest presented to parliament chairman Dr Khalifa Al Dhahrani during Tuesday's session, the businessmen claimed the decision to reintroduce the levy was "one-sided" and taken without consulting the business community, Gulf Daily News has reported.

They said many small and medium sized businesses still had not recovered from the financial crisis and economic impacts of the ongoing sectarian conflict.

There have been sporadic violent clashes in the island kingdom since early 2011, with the majority Shia calling for a greater role in governing the country, which is ruled by a Sunni dynasty.

Businessman Hisham Mattar, who is leading the protest, said some small businesses were close to closing down due the economic pressures.

The letter follows a petition signed by 5000 businessmen last year.

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