RIYADH: Bahrain’s government has unveiled a comprehensive package of fiscal reforms aimed at curbing public expenditure, generating new revenue streams, and safeguarding essential subsidies for citizens.
According to a report by the Bahrain News Agency, the measures include increases in fuel prices, higher electricity and water tariffs for certain categories, and greater dividend contributions from state-owned enterprises.
The Cabinet emphasized that electricity and water prices will remain unchanged for the first and second tariff bands for citizens’ primary residences, including homes accommodating extended families.
These reforms are aligned with Bahrain’s Economic Vision 2030, which seeks to reinforce fiscal discipline, diversify revenue sources beyond crude oil, and ensure long-term fiscal sustainability.
“The Cabinet confirmed that electricity and water tariffs for the first and second tariff bands for citizens’ primary residences will remain unchanged, taking into account extended families residing in a single household,” BNA reported.
The Cabinet also agreed to defer any changes to the subsidy mechanisms for electricity and water used in citizens’ primary residences until further studies are completed. At the same time, it approved amendments to electricity and water consumption tariffs for other categories, with implementation scheduled to begin in January 2026.
Under the proposed reforms, a 10 percent corporate income tax will be levied on companies with revenues exceeding 1 million Bahraini dinars ($2.6 million) or annual net profits above 200,000 dinars.
The new corporate tax framework is expected to come into force in 2027, subject to the completion of necessary legislative and regulatory approvals.
In addition, Bahrain plans to increase natural gas prices for businesses and reduce administrative government spending by 20 percent as part of broader cost-cutting efforts.
The government also aims to improve the utilization of undeveloped investment land that already has infrastructure in place by introducing a monthly fee of 100 fils per square meter, with implementation anticipated in January 2027.
The Cabinet further tasked the ministers of labor, legal affairs, and health with reviewing fees related to worker permits and health care services.
According to the report, revised fees will be phased in gradually over a four-year period starting in January 2026, with domestic workers exempt from the changes.
Authorities stressed that the reforms are designed to streamline government procedures that support investment, attract foreign capital, and strengthen the role of the private sector in driving economic growth.
