VAT refund offer triggers gold rush in Bahrain
Indian tourists to the small Middle East island country throng gold shops to avail of new incentive on jewellery purchases; Tourists can get VAT refund at spl counters opened at duty-free shopping by producing original bill along with the item; Instant bank transfer is done for all those having non-rupee bank accounts; Cash in currency of choice also provided through money-changer firms
image for illustrative purpose
- Bahrain govt doubled value-added tax to 10% early 2022
- Jewellers voiced concerns over business loss
- Subsequently, govt waived VAT for tourists
- VAT refund is not applicable on purchase of gold coins
- Expats in Bahrain are not eligible for VAT refund
Manama (Bahrain): The demand for yellow metal soared mainly among tourists from India and other Asian countries in Bahrain after the Kingdom of Bahrain decided to refund VAT on purchases made for gold and jewellery.
The decision was taken following an appeal by jewellers who stated that the increase of VAT from 5 per cent to 10 per cent on gold from early 2022 will hit their businesses. The Domestic and Foreign Trade Department, which is under the Ministry of Industry and Commerce implements the VAT refund order. India has a sizable number of expats in Bahrain.
Expats in Bahrain are not eligible for VAT refund as the decision is mainly taken to encourage purchases by tourists. As per the VAT refund decision, the refund is given at special counters opened near duty-free shopping on production of original bill along with the item. Instant bank transfer is done for all those having non-rupee bank accounts. Cash in currency of choice is given in a counter located nearby after showing a receipt given by the VAT refund desk through a money-change firm.
"The VAT refund is not given on purchase of gold coins. The new incentive has been received very well by the tourists. Moreover, Bahraini gold is reputed for purity and fetching a good amount at the time of exchange in future," an employee of Devji Jewellery said,
Bahrain witnessed 6.8 per cent year-on-year growth in GDP in second quarter of current fiscal. Bahraini Dinar (BD) is very strong and it is the second largest valued currency in the world. Saudi Arabia is the largest trade partner of Bahrain. Bahrain also imports crude from Saudi and refines it to cater to the export demand. Post-pandemic, though Bahrain is a tiny country with a population of less than 2.5 million, it has a booming economy driven by revenue from refined oil. In the 20th century, its growth was also driven by non-oil sectors with focus on transforming Manama, the capital of Bahrain, into a world-class city and as an alternative hub for the banking and insurance sectors.
Tax-free regime for income has attracted many to migrate to Bahrain for greener pastures. Life thrives in Bahrain round-the-clock with zero crime and nightlife unlike most of the Middle East countries. Though Dubai and Abu Dhabi are also known banking and financial hubs, high realty prices and congestion have forced many to set up their head offices in Bahrain.
