Bahrain's parliament has approved the introduction of 5% value-added tax (VAT) in the kingdom from 1st January 2019.
According to the state-run Bahrain News Agency (BNA), the country's House of Representatives voted on the introduction of VAT in an extraordinary session ordered by royal decree.
The bill, which would see Bahrain join the UAE and Saudi Arabia in implementing VAT, must also be approved by the parliament's Upper House, which is expected to hold a similar session later this week.
"The introduction of VAT will be a big challenge for the local Bahrain market," said Michael Camburn, Bahrain Indirect Tax Leader at Deloitte Middle East. "Businesses now have less than four months to be prepared for these changes. If organisations have so far have not yet started, they should immediately start assessing the impact of the tax on their operations, commercial and pricing strategy and impact on their IT and financial reporting systems."
Software vendors in the UAE and Saudi Arabia have reported a surge in demand for basic accounting packages and other applications to help businesses to manage their VAT since the introduction of the tax in those countries at the start of the year.
Deloitte has recently also launched its new version of its ‘VAT in the GCC' mobile app in Arabic and English to help businesses in their readiness phase.
"Our extensive VAT implementation experience in the UAE, KSA and other countries coupled with our active presence in the region, has enabled us to develop a practical and scalable approach to support client requirements throughout the implementation and beyond," Camburn added.