Bahraini Court Rejects Lawsuit Raised by Lawyer to Abolish VAT on Electricity Bills
2019-02-27 - 7:34 p
Bahrain Mirror: The High Administrative Court rejected a lawsuit filed by lawyer Mohammad Al-Thawadi, demanding abolishing decision to apply VAT on services of the Electricity and Water Authority. The lawyer said that he would appeal the verdict in the Court of Appeals after receiving the reasons for rejecting the case and reasoning of the verdict.
Al-Thawadi brought the case against both the minister of Electricity and water in his capacity and the chief Executive officer of the Electricity and Water Authority in his capacity, saying that he was a beneficiary of the services of the Electricity and Water authority and was surprised to receive a message from the authority via e-mail telling him about applying the value-added tax on the electricity and water services by 5% of the value of the service, retroactively, as of the January 2019 invoice.
He added that his lawsuit was based on the first paragraph of article (9) of Decree-Law No. 48 of 2018 concerning VAT which expressly stated that "supplies provided by Government entities shall be subjected to tax where they are conducted in a non-sovereign capacity by practicing an economic activity in accordance with competitive mechanism with the private sector", which means that the legal legislator has claimed major conditions for subjecting government services provided by the government parties to the VAT, most importantly that the government entity does not exercise these services in a sovereign capacity, and the possibility of competition between the government and private sectors in the providing services.