Oliver Cornock: ALL BLOG POSTS
Among the GCC countries, Bahrain was in many senses the first to fully embrace the need to diversify its revenue streams away from hydrocarbons. The arrival of banks from Lebanon in the late 1970s gave it a head start in developing financial services and, in particular, offshore investment fund activity. This has stood the economy in good stead, but competition in sectors targeted for diversification, such as financial services, logistics, industry and tourism, has risen dramatically.
While recently introduced, a new value-added tax (VAT) – previously a relatively contentious issue – has raised hopes in terms of public revenue generation and transparency.
The introduction of a flat 5% value-added tax on January 1, 2018 is part of ongoing efforts to boost government revenue and increase the overall transparency of the market. Although still in its early days, the move comes against a backdrop of positive sentiment among business leaders, as shown in the second iteration of Oxford Business Group’s Business Barometer: UAE CEO Survey. Of the nearly 150 executives surveyed, more than three-quarters had positive or very positive expectations of local business conditions, while 90% said the level of transparency for conducting business was high or very high relative to the broader region.