Expat remittances in Bahrain may soon face a 2% tax, with parliament scheduled to discuss and vote on the proposal this Tuesday. Initially rejected by the Shura Council in January 2024, the tax faced criticism for potentially driving expats toward black markets or cryptocurrencies, threatening Bahrain’s financial stability. The draft law has undergone several revisions since its first submission in February 2023. The original version proposed a tiered tax system: 1% for transfers under 200 dinars, 2% for transfers between 201 and 400 dinars, and 3% for amounts above 400 dinars. Exemptions were also proposed for investment agreements, capital transfers, and specific cases under Bahrain’s tax rules. The bill, fronted by Lulwa Al Rumaihi and supported by Dr. Muneer Seroor and three other MPs, aims to reduce Bahrain’s dependence on oil revenue and keep more money circulating locally, giving the economy a boost. However, the Shura Council’s Financial and Economic Affairs Committee warned that taxing remittances could backfire, leading to an increase in illegal transfers and money laundering. These concerns could undermine Bahrain’s standing as a financial hub in the Gulf. The committee also raised concerns about Bahrain’s international obligations, noting that treaties like the “Unified Agreement for the Investment […]