Criminal Modus Operandi in Bahraini Tax Law No. (40) of 2017

Abdullah Ehjelah1

Abstract
This study deals with the dynamics surrounding tax evasion in the Kingdom of Bahrain in the context of its adherence to the Common GCC Agreement for Excise Tax. Since the inception of tax obligations, a subset of taxpayers has resorted to evasion, posing a threat to the nation’s economic stability. In pursuit of upholding the principles of the aforementioned Agreement and safeguarding the economic integrity of the state, the Kingdom of Bahrain formally ratified  the Common GCC Agreement for Excise Tax in 2017 through Law No. (39) of 2017. To integrate this Agreement into its legal framework, the Kingdom also enacted Law No. (40) of 2017, explicitly addressing the issue of Excise Tax. Notably, Article No. (26) of this law introduced punitive measures against tax evasion, aimed at preserving the national economy, while Article No. (27) outlined a spectrum of penalties, including imprisonment and fines, for offenders. Using a content analysis approach, we examine pertinent legal documents and court cases associated with tax evasion to gain a deeper understanding of the legal framework and its practical implementation. The primary objective of this research is to offer a comprehensive insight into the consequences of lenient penalties on tax evasion within the Kingdom of Bahrain, with the ultimate aim of providing valuable insights for the development of effective policymaking and tax enforcement strategies The study argues that the leniency of the punitive measures in Law No. (40) renders the criminalization of tax evasion less effective. This is particularly concerning given the critical role of taxation in fiscal policy, where it serves as a pivotal revenue source for the state’s treasury and plays a significant part in maintaining overall economic stability. Consequently, the study identifies the leniency of penalties as a central issue in need of investigation.

Keywords: Bahraini, Crime, Tax, Punishment, Evasion.