Under pressure from mounting debts and poor credit ratings, Bahrain’s government is trying to get its fiscal house in order, announcing wide-ranging measures to cut costs and raise taxes. The government plans to slash administrative costs by 20%, impose a 10% tax on local companies’ profits, and charge a levy on undeveloped land.
New fees will also be introduced for sewage services, the cost of foreign workers’ permits will be raised, and natural gas subsidies will be phased out for companies.
Bahrain has not said how much it will raise from the new taxes or save from the spending cuts, and it is unclear if it will be enough to bring its budget out of the red. The previously announced budget for 2026 included spending of 4.5 billion dinars ($12 billion), with a shortfall of around 1.1 billion dinars.
