A significant raise in municipal fees could be imposed on major factories and other large industrial facilities in Bahrain, rising by as much as 2,400 per cent in some cases, a report said.

The Muharraq Municipal Council is behind the proposal to amend rates, which could result in smaller industrial firms paying less, reported the Gulf Daily News, our sister publication.

It has now been referred to the Works, Municipalities and Urban Planning Affairs Ministry and will go before the Cabinet to decide whether to adopt the move and, if so, whether it should be implemented nationwide.

At present small industry is charged municipal fees of between BD5 ($13.16) and BD11 ($29) monthly, while medium industry pays BD15 ($39.5) to BD40 ($105) and large industry from BD50 ($131) to BD200 ($526.50).

Under the new proposal municipal fees would be calculated based on the size of each facility, at a cost of 70 fils per sq m for factories.

Council financial, administrative and legislative committee chairman Ghazy Al Murbati said that, if approved, factories would be charged a minimum of BD30 and a maximum of BD5,000 every month depending on their size.

Workshops, garages, car cleaning companies and handicrafts showrooms would be charged 60 fils per square metre, with the monthly bill a minimum of BD10 to a maximum of BD3,000 depending on size.

“When bylaws on municipal fees were introduced in 2005, they disregarded the type of activity, its significance, its operations, its size and capacity and its production,” said Al Murbati.

“It just put all in the same basket. For example, a major factory with more than 3,000 employees and huge profits in the millions pays just BD200, while a medium-sized workshop is forced to pay BD40.

“There is no real or proper calculation here. The officer in charge of collection could charge big factories BD50, which means they are paying almost the same as medium-sized ones.

“Fees are not rents and they should be governed differently than they are now for the sake of fairness and ensuring that money is collected properly from those making millions, while helping reduce the burden on small and medium establishments.”

Al Murbati argued that large factories would be able to afford the large increase in municipal rates, which could increase by as much as 2,400 per cent for companies asked to pay BD5,000 in municipal fees.

“Even if the maximum is imposed on big factories, it is nothing compared with the money they make,” he said.

“For that we are proposing new ranges that will ensure the establishments’ size is taken into account when making calculations, within a range that should not be exceeded.”

However, the idea is unlikely to go down well with factories and other industrial firms in Bahrain.

Bahrain’s businessmen on Thursday criticised a decision to raise leasing rates for industrial plots and plans to slap Customs duties on industrial raw materials.

That plan was branded “dangerous” during a closed-door meeting of the Bahrain Chamber of Commerce and Industry, due to concerns that raising rates by 400 per cent to 800 per cent would cause serious damage to the industrial sector and could cost jobs. – TradeArabia News Service