Gulf Digital News, 4 May 2026: Bahrain’s Parliament is set to debate and vote on amendments to the GCC Unified Selective Tax Agreement, attached to Bahrain Decree No. 22/2026, introducing updated mechanisms for excise tax calculation and administration across member states.
The amendment, signed on 1 June 2025, revises key provisions of the existing GCC excise tax framework, including tax calculation methods, definitions, and administrative mechanisms. It introduces greater flexibility for member states to apply excise tax using a percentage-based model, a fixed per-unit model, or a hybrid approach combining both systems.
A key technical change clarifies that the retail price used for excise tax calculation will exclude VAT and excise tax itself, improving consistency and transparency in pricing structures across GCC markets.
The reform also introduces a policy shift in taxation of sugar-sweetened beverages, linking excise duties more directly to sugar content rather than applying a uniform tax rate. This aligns with public health objectives and World Health Organisation recommendations aimed at reducing sugar consumption.
Member states will also be granted increased autonomy over payment timelines and administrative procedures for excise tax collection, allowing more flexible domestic implementation while maintaining regional coordination.
The Finance and National Economy Committee described the amendment as part of a broader strategy to enhance fiscal integration within the GCC while ensuring adaptability to national economic and health priorities. It also updates Article 1, 3, 6 and 16 of the agreement.
The committee emphasised that the reform strengthens Bahrain’s position within the regional tax framework, reduces market distortions, and supports long-term economic stability while ensuring alignment with domestic excise tax legislation and international best practices.