MANAMA: The continuing run down of Bahrain's oil and gas reserves means that sooner or later the government will have to levy taxes in the country.
Taxation, at some time in the future, is inevitable to meet the level of government expenditure according to the Bahrain Chamber of Commerce and Industry (BCCI) chairman Dr Essam Fakhro.
At a breakfast meeting of the Australian Business Group at the Ritz-Carlton Bahrain Hotel and Spa, Dr Fakhro gave an hour-long talk to more than 80 delegates about the growth and development of both Bahrain and the BCCI pointing out the changes that had been achieved over the years.
And he said that while Bahrain in particular and the region in general had long been seen as tax free areas, this was not something that could continue for ever.
He said there had already been calls from parliament for an investment tax and that the government was already carrying out a study about possible corporate tax in Bahrain.
"These has been talk of introducing forms of taxation in various centres of the region for some time, with a value added tax having been discussed in the UAE," he said.
"Here in Bahrain, the government cannot afford to continue to pay for everything and subsidise everything so at some point taxation is inevitable.
"This is something we must accept and look into."
He said that the government should also look at the large subsidies the country pays over a wide range of products.
"It is right that lower paid people should receive support but a poor family benefiting from subsidised food is not the same as a businessman running a restaurant getting subsidised food.
"There are varying tariffs on electricity and we should look at varying the subsidies to people buying things like food and fuel as well."
Commenting on the development of Bahrain, he said that the country was historically, and remained, the most open economy in the region with the lowest taxation and greatest transparency and led the way in developing democracy and women's representation.
"The BCCI was founded in 1939 as a democratic organisation which makes it the oldest democratic institution in the Middle East," he added.
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