VIDEO: Public concerned over rising cost of living after VAT

MEMBERS of the public have expressed reservations over the forthcoming Value-Added Tax (VAT), after it was approved by the MPs and the Shura Council this week.

Bahrainis and expats said they were concerned about the prospect of rising costs of living, particularly after VAT is implemented at a rate of five per cent from January 1. 
Some said pay rises were needed to help people cope with inflation. 
“There are a lot of rumours and we don’t know yet what is taxable and how it will impact us with our salaries,” said 37-year-old Marie Chris, from the Philippines. 
“My concern is groceries and sending money to our families back home, as well as utility bills. 
“If I’m sending BD100 back to my family with 5pc tax, that’s BD5 I can use for other things.”
Ms Chris feared VAT would impose a strain on monthly budgets, a concern shared by Bahrainis. 
“If they want to impose VAT then there should be an adjustment in salaries,” said a 40-year-old Bahraini on condition of anonymity. 

“The people should not be expected to shoulder these costs without an adjustment to salaries, especially since the cost of living is on the rise.” 
Bahraini Mahmood Fadhel, who is a working university student, argued Bahrainis were not ready to take on additional costs – especially with no prospects of higher incomes. 
“VAT will create a heavier financial burden on citizens, especially since salaries are stagnant while life expenses are on the rise,” said the 20-year-old. 
“By the end of the month we will have nothing left.”
He argued VAT should be levied on expats only. 
“Impose VAT on expats, who make up around 700,000 of the population,” he said. 
Bahraini Ameer Mansoori also expressed opposition to VAT. “I am against VAT because this will all be taken from the citizen’s pocket,” said the retired 47-year-old.
“Anything that harms citizens should not be encouraged. When they implemented this in the UAE and Saudi Arabia it was OK, because they have higher incomes. 
“But here in Bahrain our salary is barely covering our monthly expenses.
“This decision was implemented at the worst possible time and our salaries are barely taking us through the month – and now we have to pay taxes as well.” 

He urged the government to impose taxes on big companies better able to shoulder the expenses, not Bahrainis.

Meanwhile, retired Bahraini teacher Mansoor Essa, 63, stated VAT would require specific budgeting on an already tight income. “There are many items we use on a daily basis that will not be exempt from the tax and this will be an additional burden now,” said Mr Essa. “If it’s possible I hope they can reduce it or cancel it completely, as it is an unnecessary burden.” Bahrain could generate revenues worth BD600 million from VAT after it is implemented on January 1, it has been claimed.

Implementation is in line with a GCC-wide agreement designed to generate additional income for the government, after low oil prices post-2014 left a significant dent on the economy.

Source: http://www.gdnonline.com/Details/424878/VIDEO-Public-concerned-over-rising-cost-of-living-after-VAT