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Bahrain – Bill to scrap expat levy rejected

03 December 2013

Members of Bahrain's Shura Council rejected a parliamentary bill to scrap monthly fees for foreign workers in low paid jobs. Public and private sector companies have to pay BHD 10 (USD 26.27) for every expatriate on their books or BHD 5 (USD 13.13) if they employ fewer than five, reports the Gulf Daily News.

The controversial fees, which earlier spawned protests by small and medium enterprises, were reintroduced in August after being suspended for 28 months to help businesses recover from financial losses caused by the 2011 unrest.

MPs later proposed a bill to scrap the fees in the low-income sector to provide companies with further assistance.

However, council members have rejected the proposal, following a warning from the Labour Market Regulatory Authority (LMRA) Chief Executive Ausamah Al Absi, who claims that reducing the fees based by sector would cause chaos and threaten the future of the labour market.

"From 2011 until last year, requests for expatriate workers increased by +21%, as many started taking advantage of the fee halt. This will happen again with parliament's proposal, because we will see businesses changing their records to include a low-earning sector to get the fee stopped. That will affect the labour market and encourage cheating of the system,” Mr Al Absi commented.

"The Cabinet was right in halving fees on businesses with less than five employees, because they need every [penny] to continue running as small enterprises, with criteria depending on their size rather than by the sector," he added.

Labour Minister Jameel Humaidan, who is also chairman of the LMRA board, said businesses were already benefiting from halved fees: "Fishing and gardening and other low-earning professions are benefiting from the halved rates. If we exempt sectors, then we will have many shifting their scope of operations towards that field. We will see non-deserving companies benefiting, which kills the reason behind initiating the reduced fees in the first place, which is helping people."

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