He explained such fears stemmed from Bahrain having the most zero-rated goods
and services in the GCC.
25(BNA): The Minister of Finance and National Economy Shaikh Salman bin Khalifa Al Khalifa affirmed that the Ministry will take all necessary measures to ensure that the Value Added Tax (VAT) is not applied on zero-rated goods
and services - 94 basic food items in addition to goods and services that support essential sectors - in line with the VAT Law and its Executive Regulations.
It is still too early to see the effects of SST on the prices of goods as majority of traders are still using their existing stock obtained during the tax holiday (zero-rated Goods
and Services Tax) since June 1.
It was explained that under a zero-rating incentive mechanism, "all VAT is removed from the zero-rated goods
, activity or firm.
An earlier statement from flydubai had said that zero-rated goods
and services include ticket fares, on-board products, and extras such as upgrades to Business Class, extra-legroom seats, and additional baggage.
Furthermore, title five discusses profit margins and explains how to calculate VAT based on profit margins, while title six addresses zero-rated goods
and services, including telecommunications, international transportation of passengers or goods, investment grade precious metals, new and converted residential buildings, as well as healthcare, education and buildings earmarked for charity.
Those in the zero-rated goods
and services category include certain medications and medical equipment specified by the Ministry of Health and Saudi Food and Drug Authority, supply of gold, silver and platinum that is for investment purposes - at least 99 per cent pure - and tradeable in the international bar market.
Drum explained that the difference between zero-rated and exempt tax is that suppliers of zero-rated goods
and services are eligible to reclaim their input VAT, whereas suppliers of exempt goods are unable to do so.
Apart from these rates, there would be exempted goods and zero-rated goods
In regard to zero-rated goods
, a credit is allowed for the VAT paid on the product at earlier stages in the value-added chain.
The only sensible conclusion to draw is that Mr Cameron, if he wins, would put up VAT and possibly extend it to zero-rated goods
such as food, kids' clothes and bus fares.