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Bahrain – Businessmen protest the expat levy

05 February 2014

A group of angry businessmen in Bahrain are calling for an end to a mandatory tax on foreign workers and have taken their demands to parliament, reports tradearabia.com. They claim that thousands of small and medium-sized enterprises (SMEs) have still not recovered from the financial downturn caused by the unrest in 2011.

Public and private sector companies have to pay the BHD 10 (USD 26) Labour Market Regulatory Authority (LMRA) fee for every expatriate they employ, or BHD 5 (USD 13) if they hire fewer than five foreigners.

The group, led by businessman Hisham Mattar, submitted a letter of protest to Parliament Chairman Dr Khalifa Al Dhahrani during the session yesterday. They said the decision to reintroduce the levy was "one-sided" and taken without consulting the business community.

According to a Gulf Daily News article last month, the LMRA gave businesses four weeks to pay the tax or all valid visas for expatriate employees would be cancelled.

Mr Mattar commented: "There are several businessmen who have received emails from the LMRA asking them to pay the fees or the visas of their workers will be cancelled. The small and medium enterprises that represent a large chunk of the business sector in Bahrain have still not recovered because of the ongoing situation in Bahrain."

Mr Mattar, who has not paid the fees for the 40 foreign workers he employs, has demanded MPs put an end to the levy. He also warned that several small businesses were on the verge of closure while others were struggling to stay afloat.

The businessmen also intend follow up on a petition signed by 5,000 businessmen last year against the tax, which was submitted to His Royal Highness Prime Minister Prince Khalifa bin Salman Al Khalifa.

The controversial fees were reintroduced in August last year after being suspended for 28 months to help businesses recover from financial losses caused by the unrest. MPs then came up with a bill to scrap the fees in the low-income sector to provide companies with further assistance.

The Shura Council in December, however, rejected the bill following a warning from LMRA Chief Executive Ausamah Al Absi, who claimed that reducing the fees based on sectors would cause chaos and threaten the future of the labour market.

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