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Bahrain cutting budget deficit
Bahrain recently quickened the pace of economic reforms by passing a package of laws, notably the introduction of a VAT and pension reforms.
The 5% VAT is one of the key commitments under the Gulf Finance programme. The agreement provides for the imposition of a VAT in all Gulf Cooperation Council countries during the current year.
The tax is to promote and diversify non-oil financial revenues. It comes after the introduction in December of a tax, ranging 50-100%, on tobacco and its derivatives, soft drinks and energy drinks.