Bahrain Launches Major Fiscal Reform Package to Strengthen Public Finances

Bahrain, 05 January, 2026: Bahrain’s government has unveiled a comprehensive fiscal reform package aimed at curbing public expenditure, boosting revenues, and protecting essential subsidies for citizens, the Bahrain News Agency reported.

Key measures include:

• Fuel price increases and higher electricity and water tariffs for certain categories, while primary residences remain protected.

• Greater dividend contributions from state-owned enterprises.

• New corporate income tax of 10% on companies with revenues over BD1 million ($2.6 million) or profits above BD200,000, expected from 2027.

• Natural gas price hikes for businesses and a 20% reduction in administrative government spending.

• Monthly fee for undeveloped investment land with infrastructure, starting January 2027.

The reforms align with Bahrain’s Economic Vision 2030, aiming to diversify revenue beyond oil, ensure fiscal sustainability, and maintain support for households. They also build on progress under the Fiscal Balance Programme, which doubled non-oil revenues between 2018 and 2024 and reduced recurring government spending.

The cabinet emphasized that subsidy adjustments for citizens’ primary residences will be deferred pending further study, while new utility tariffs for other categories will begin in January 2026.