Civic fees reprieve plan to help businesses stay afloat

Councillors in Muharraq have agreed to temporarily slash municipal fees on businesses as part of efforts to help them stay afloat.

Businesses pay 10 per cent of their lease a month as municipal fees, but the Muharraq Municipal Council yesterday approved an urgent proposal to reduce that amount.

During their weekly meeting, councillors said the proposal would be in effect until the business sector regains its stability and the market recovers from what they described as stagnancy.



However, Muharraq Municipality director general Ibrahim Al Jowder warned councillors that the proposal would be a constitutional violation if it is applied only to the Muharraq Governorate.

He explained that the country’s two other municipal councils – Northern and Southern – and the Capital Trustees Board should also take a similar vote since the fees are applied nationwide.

“The proposal cannot only be implemented in the Muharraq Governorate as this is not an issue of concern to residents of a particular area, it is a national issue as everyone in the country benefits from municipal services,” said Mr Al Jowder.

“I will stand by the council if the proposal includes the entire country as I believe it is a genuine call, but that would require the consent of other municipal representatives in Bahrain’s three other governorates for it to happen.

“The rejection of one municipal authority means that the proposal will not be implemented.”

His comment was supported by the council’s chairman Ghazi Al Murbati who said the proposal should be enforced nationwide, but suggested the implementation be done in phases in each governorate.

“Businesses are badly affected with the current financial and economic situation, with shops closing monthly,” he said.

“The government needs to provide support and the reduction of municipal fees for a temporary period will certainly help in the survival of these businesses.

“The constitutional violation of unequal treatment could be easily resolved by having an urgent decision from the Works, Municipalities Affairs and Urban Planning Minister to approve the move nationwide with implementation pending from the municipal authorities concerned for each area.

“That would mean the rule is effective but only put in motion when the other two councils and the board give it their approval.”

During debate on the issue, the council’s vice-chairman Hassan Al Doy said the business sector was experiencing a slump with shops in many local districts closing down.

“For example, the Casino Commercial District in old Muharraq had businesses bidding to take up shops there for BD20,000 and paying BD500 monthly rent because it was booming, but now even at BD200 rent for a shop no one wants to open there,” he said.

“It is (due to a series of factors) including the introduction of the Flexible Work Visa through which expats are competing with Bahrainis in services, a rise in power bills and the introduction of VAT last year.

“Despite all this people’s incomes are still low that even online sales have dropped sharply.”

The council also explained that the percentage of reduction in the fees and the time period will be left for the ministry to decide.

“The reduced rates will be for a temporary period, similar to the decision taken following the unrest for fees of the Labour Market Regulatory Authority until business picked up,” said councillor Bassem Al Majdami.

“This approach will ensure there is no further closures of businesses, maintain municipal revenues to ensure there are no disruption to projects and services, and allow decision-makers to come up with something that lifts the market.”

The council also approved a request by 22 traders at the 200-year-old Qaysariyah Market to slash municipal fees as restoration work continues.

A parliamentary probe into economic and real estate “stagnation” in the country was launched last month, focusing on six core issues.

They are closure of several local businesses; cancellation of commercial registrations (CRs) by the owners; a rise in the number of dud cheques; an increase in the number of financial disputes in courts; visibly empty shops and apartments; and failing projects in the real estate sector.



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