A new sewage tax could be introduced in Bahrain as the government considers alternative ways to increase revenues in light of reduced oil income.

The Cabinet has referred a draft bill to parliament that, if approved, will require people to pay for public sewage services in the same way that electricity, water and municipal rates are charged, said a report in the Gulf Daily News (GDN), our sister publication.

However, MPs have given the government until September to come up with rates – and are insisting that Bahraini homeowners should not be charged more than BD1 ($2.6) per month.

“The government wants to generate revenues from sewage services as it works to increase available funding to meet pending developmental projects,” parliament public utilities and environment affairs committee chairman MP Jamal Dawood told a Press conference yesterday.

“We have asked that domestic users get categorised as Bahrainis living in their homes, Bahrainis living in rented accommodation and non-Bahrainis.

“Businesses and industry will have their own rates.

“Bahrainis living in their property will just have to pay a maximum of BD1 (per month).

“It will be a different calculation for Bahrainis living in rented apartments and non-Bahrainis, while bulk payments will come from businesses and industries.”

The news follows the delayed approval of Bahrain’s national budget for 2015 and 2016, based on an oil price that has halved in the past year.

Bahrain has had to find ways to rein in spending, with oil revenues accounting for at least 80 per cent of the country’s revenues.

The revised budget will result in a deficit of BD1.504 billion this year and BD1.505 billion in 2016, while the debt ceiling was raised from BD5 billion to BD7 billion last November.

Other money-saving measures include the scrapping of meat subsidies from August 1, as well as the introduction of fees for as yet unnamed government services.

Dawood said MPs supported the introduction of a sewage tax, but said they were seeking further clarification.

“We are not against the new law, but we need a proper study determining its benefits in the long-run – with people already under huge financial burden related to the possible axing of subsidies by the government,” he said.

He added the proposal was due to be discussed by parliament in October when MPs returned from their summer break.

“The Works, Municipalities and Urban Planning Affairs Ministry has until the end of September to present us with a comprehensive study, or we will have the law shelved,” he said. - TradeArabia News Service