Application Mechanisms of Sales Tax in the GCC Countries: An Empirical Study on the Kingdom of Bahrain
DOI:
https://doi.org/10.61841/htfvvr03Keywords:
GCC Nations, Tax, Economic Development,, AMOS, BahrainAbstract
The Gulf Co-operation Council (GCC) countries (i.e. Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates) enjoy one of the least demanding tax systems in the world. The average total tax rate for the entire Middle East region is 23.6 percent, which is much less than the global average of 44.7 percent. Thus, the taxation structure and system of the GCC nations is uncomplicated when compared to rest of the world. Moreover, the GCC nations depend heavily on indirect taxes and revenue from energy exports, rather than internally generated funds. Though this system has its advantages, it may become a cause of concern for authorities in the future as taxation can influence the overall growth in different dimensions. Thus this study analysed the effect of sales tax collection on the economic development in Bahrain. To do so, a structured survey was conducted for receiving observations of 384 tax payee respondents in Bahrain and to analyse the effect. The data is analysed and hypothesis is tested by using IBM-SPSS-AMOS package 25.0. The study found that the direct effects of sales tax on the economic development in Bahrain are positive and significant. The originality of the manuscript goes back to studying the concept in the Arab world. On the basis of the result, this research endorsed that, the economic development in Bahrain is heavily in line with consistent growth of revenue collection efficiency.
Downloads
References
1. Awang, Z. (2015). SEM made simple: A Gentle Approach to Learning Structural Equation Modeling.
Bandar Baru Bangi: MPWS Rich Resources.
2. Awang, Z., Ahmed, U., Hoque, A. S. M. M., Siddiqui, B. A., Dahri, A. S., and Muda, H. (2017). The Mediating Role of Meaningful Work in the Relationship Between Career Growth Opportunities and Work Engagement. International Academic Conference on Business and Economics (IACBE 2017), Faculty of Economics and Management Sciences (FESP), Universiti Sultan Zainal Abidin (UniSZA), October 07-08.
3. Awang, Z., Hoque, A. S. M. M., Muda, H., & Salleh, F. (2017). The Effects of Crowdfunding on Entrepreneur’s Self-Belief. In International Academic Confernce on Business and Economics (IACBE 2017), Faculty of Economics and Management Sciences (FESP), Universiti Sultan Zainal Abidin (UniSZA), October.
4. Awang, Z., Hoque, A.S.M.M., Aroaiasamy, L., Yili, D., & Yousef, A.N.B. (2019). The Effects of M- Commerce and Culture on Performance: A Structural Equation Modeling of Constructs that Predict Bangladeshi SME Performance. In International Postgraduate Research Conference (2nd IPRC 2019), Universiti Sultan Zainal Abidin (UniSZA), Gong Badak Campus, Kuala Terengganu, Malaysia, December.
5. Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 92- 120.
6. Elecon Engineering Company Limited. (2012). 53rd Annual Report 2012-13. Gujarat, India: Elecon.
7. Field, M. (1985). Survey of Bahrain: Economy: Spending to be cut in budgetary squeeze. London: Financial Times.
8. Global Credit Research. (1998). Qatar's Baa2 rating faces short term strain from Natural Gas Projects. New York: Moody's Investors Service.
9. Hoque, A. S. M. M. (2018). Digital Device Addiction Effect on Lifestyle of Generation Z in Bangladesh. Asian People Journal (APJ), 1(2), 21-44.
10. Hoque, A. S. M. M. (2018). Does government support policy moderate the relationship between entrepreneurial orientation and Bangladeshi SME performance? A SEM approach. International Journal of Business Economics and Management Studies, 6(3), 37-59.
11. Hoque, A. S. M. M. (2018). The effect of entrepreneurial orientation on Bangladeshi SME performance: Role of organizational culture. International Journal of Data and Network Science, 2(1), 1-14.
12. Hoque, A. S. M. M., & Awang, Z. (2016). Exploratory Factor Analysis of Entrepreneurial Marketing: Scale Development and Validation in the SME context of Bangladesh. In INTERNATIONAL SOCIAL SCIENCES AND TOURISM RESEARCH CONFERENCE 20-22 APRIL 2016 (p. 22).
13. Hoque, A. S. M. M., & Awang, Z. (2016). The Impact of Marketing Strategy on Small and Medium Scale Enterprises (SMEs): Case Study in Bangladesh. International Postgraduate Research Conference (IPRC 2016), Universiti Sultan Zainal Abidin (UniSZA), Gong Badak Campus, Kuala Terengganu, Malaysia, October.
14. Hoque, A. S. M. M., & Awang, Z. (2016). The Sway of Entrepreneurial Marketing on Firm Performance: Case of Small and Medium Enterprises (SMEs) in Bangladesh. In Terengganu International Business and Economics Conference (TiBEC-V), Terengganu, Universiti Teknologi Mara (UiTM) (pp. 174-194).
15. Hoque, A. S. M. M., & Awang, Z. (2016, April). The Exploratory Factor Analysis (EFA) of Entrepreneurial Marketing Scale-Development and Validation. In Tourism Conference, 20-22 april (p. 22).
16. Hoque, A. S. M. M., & Awang, Z. (2019). Does gender difference play moderating role in the relationship between entrepreneurial marketing and Bangladeshi SME performance? Accounting, 5(1), 35-52.
17. Hoque, A. S. M. M., Awang, Z., & Ghani, N. A. (2016). Conceptual Model for Quality of Life in the Perspective of Social Entrepreneurship. In International Conference on Science, Engineering, Management and Social Science (ICSEMSS 2016), Universiti Teknologi Malaysia (UTM), Johor Bahru, Malaysia, October (pp. 6-8).
18. Hoque, A. S. M. M., Awang, Z., & Gwadabe, U. M. (2019). The Effect of Entrepreneurial Marketing on Bangladeshi SME performance and the Role of Organizational Culture: A Structural Equation Modelling. Journal of Management and Operation Research, 1, 1-21.
19. Hoque, A. S. M. M., Awang, Z., & Salam, S. (2017). The Effects of Relationship Marketing on Firm Performance: Small and Medium Enterprises (SMEs) in Bangladesh. In 1st International Conference on Business and Management (ICBM-2017), BRAC Business School (BBS), BRAC University, Dhaka, Bangladesh, September (pp. 21-22).
20. Hoque, A. S. M. M., Awang, Z., & Siddiqui, B. A. (2017). Technopreneurial Intention among University Students of Business Courses in Malaysia: A Structural Equation Modeling. International Journal of Entrepreneurship and Small & Medium Enterprise (IJESME), 4, 1-16.
21. Hoque, A. S. M. M., Awang, Z., Baharu, S. M. A. T., & Siddiqui, B. A. (2018). Upshot of Generation ‘Z’ Entrepreneurs’ E-lifestyle on Bangladeshi SME Performance in the Digital Era. International Journal of Entrepreneurship and Small & Medium Enterprise (IJESME), 5, 97-118.
22. Hoque, A. S. M. M., Awang, Z., Jusoff, K., Salleh, F., & Muda, H. (2017). Social business efficiency: Instrument development and validation procedure using structural equation modelling. International Business Management, 11(1), 222-231.
23. Hoque, A. S. M. M., Awang, Z., Muda, H., & Salleh, F. (2018). Ramification of crowdfunding on Bangladeshi entrepreneur’s self-efficacy. Accounting, 4(4), 129-138.
24. Hoque, A. S. M. M., Awang, Z., Siddiqui, B. A., & Sabiu, M. S. (2018). Role of employee engagement on compensation system and employee performance relationship among telecommunication service providers in Bangladesh. International Journal of Human Resource Studies, 8(3), 19-37.
25. Hoque, A. S. M. M., Gwadabe, U. M., & Rahman, M. A. (2017). Corporate entrepreneurship upshot on innovation performance: The mediation of employee engagement. Journal of Humanities, Language, Culture and Business, 1(6), 54-67.
26. Hoque, A. S. M. M., Siddiqui, B. A., & Awang, Z. (2018). Technopreneurial Competency Effect on Technology-based SME Performance: A Structural Equation Modelling on Bangladeshi SMEs. International Journal of Entrepreneurship and Small & Medium Enterprise (IJESME), 5, 55- 73.
27. Hoque, A. S. M. M., Siddiqui, B. A., & Awang, Z. (2018). Technopreneurial Competencies Effects on Bangladeshi SME Performance: A Structural Equation Modeling. In 2nd ASIA International Multidisciplinary Conference (AIMC 2018), Faculty of Management, Universiti Teknologi Malaysia (UTM), Johor Bahru, Malaysia, May (pp. 12-13).
28. Hoque, A. S. M. M., Siddiqui, B. A., Awang, Z. B., & Baharu, S. M. A. T. (2018). Exploratory Factor Analysis of Entrepreneurial Orientation in the Context of Bangladeshi Small and Medium Enterprises (SMEs). European Journal of Management and Marketing Studies.
29. Hoque, A.S.M.M, Awang, Z., Aroaiasamy, L., Yili, D., & Siddiqui, B.A. (2019). Mediating Role of Technology Adoption on The Relationship Between E-Marketing Orientation and SME Performance. In International Postgraduate Research Conference (2nd IPRC 2019), Universiti Sultan Zainal Abidin (UniSZA), Gong Badak Campus, Kuala Terengganu, Malaysia, December.
30. Hvidt, M. (2013). Economic Diversification in GCC countries: Past record and future trends, Kuwait Programme on Development, Governance and Globalisation in the Gulf States, Research paper No. 9, London School of Economics.
31. IMF, International Monetary Fund (2015), Regional Economic Outlook: Middle East and Central Asia, October, Washington, DC.
32. International Monetory Fund. (2001, 07 November). IMF concludes 2001 article for consultation with Saudi Arabia. Washington DC: Public Information Notice No.01/119.
33. International Monetory Fund. (2001, 29 June). IMF concludes article for consulatation with Kuwait. Washington DC: Public Information Notice No.01/60.
34. International Monetory Fund. (2002, 10 September). IMF concludes 2002 article for consultation with Qatar. Washington DC: Public Information Notice No.02/99.
35. International Monetory Fund. (2003, 11 March). IMF concludes 2002 article for consultation with the United Arab Emirates. Washington DC: Public Information Notice No.03/30.
36. International Monetory Fund. (2010, 17 February). IMF executive board concludes 2009 article for consultation with Oman. Washington DC: Public Information Notice No.10/21.
37. Klaus Schwab, M. E. (2008). The global competitiveness report. Geneva, Switzerland: World Economic Forum.
38. Koren, M., & Tenrero, S. (2010), Volatility, Diversification and Development in the Gulf Cooperation Council Countries, Kuwait Programme on Development, Governance and Globalisation in the Gulf States, Research paper No. 9, London School of Economics.
39. Lasi, H.; Fettke, P.; Kemper, H.-G.; Feld, T.; Hoffmann, M. Industrie 4.0. Wirtschaftsinformatik 2014, 56, 261–264.
40. Lynch, C. (1999). Competitive advantage: Creating and sustaining superior performance by Michael
E. Porter. Cited by Chacarbaghi and Lynch.
41. Marshall, G. (1999). Sosyoloji Sözlüğü (Çev. Osman Akınhay-Derya Kömürcü), Bilim ve Sanat Yayınları, Ankara.
42. Mathew, R. (1992, 14 July). Survey of Bahrain: Economic changes add to the strain of adaptation - The prospects for political change. London: Financial Times.
43. Nadine Ghannam, M. A. (2012, 21 November). Tax reforms continue worldwide despite economic turmoil, electronic filing increasing especially. Retrieved April 4, 2014 from http://www.worldbank.org/en/news/ press-release/2012/11/21/tax-reforms-continue-worldwide- despite-economic-turmoil-electronic-filingincreasing-especially
44. Niblock, T., & Malik, M. (2007). The Political Economy of Saudi Arabia, Routledge: London.
45. OBG, Oxford Business Group (2016a), Bahrain Economy: Diversification key to Bahrain‟s Holistic Economic Development, https://oxfordbusinessgroup.com
46. OBG, Oxford Business Group (2016b), Bahrain Economy: Subsidy cuts a tricky task for Bahrain‟s government, https://oxfordbusinessgroup.com
47. Oláh, J., Karmazin, Gy., Pető, K., Popp, J., 2017, Information technology developments of logistics service providers in Hungary. “International Journal of Logistics Research and Applications”, 21(3), 332-344.
48. Oláh, J., Zéman, Z., Balogh, I., Popp, J., 2018, Future challenges and areas of development for supply chain management. “LogForum”, 14(1), 127-138.
49. Oláh, J.; Karmazin, G.; Pet˝o, K.; Popp, J. Information technology developments of logistics service providers in Hungary. Int. J. Logist. Res. Appl. 2018, 21, 332–344. [CrossRef]
50. Onwuchekwa C. I. (2000). Business policy and strategic Planning. Onitsha: University Publishing Coy.
51. Pereira, A.; Romero, F. A review of the meanings and the implications of the Industry 4.0 concept. Procedia Manuf. 2017, 13, 1206–1214.
52. Popp, J.; Erdei, E.; Oláh, J. A precíziós gazdálkodás kilátásai Magyarországon. Int. J. Eng. Manag. Sci. 2018, 3, 133–147. Available online: http://ijems.lib.unideb.hu/cikk/cikk/5af01cf23a77a (accessed
on 12 March 2018).
53. Saad, S., Hoque, A.S.M.M., & Awang, Z. (2019). Technopreneurial Marketing (TM): A Construct for Integrating Emerging Technopreneurship and Marketing Perspectives. In The 7th International Seminar on Entrepreneurship and Business (ISEB 2019), Penang, Malaysia, November.
54. Saad, S., Hoque, A.S.M.M., Siddiqui, B.A., Awang, Z., & Yili, D. (2019). Dynamic Agripreneur Ramification on Agri-firm Business Performance: A Study of Rural Development in Bangladesh. In International Postgraduate Research Conference (2nd IPRC 2019), Universiti Sultan Zainal Abidin (UniSZA), Gong Badak Campus, Kuala Terengganu, Malaysia, December.
55. Saad, S., Seduram, L. A., & Sade, A. B. (2019). The Effect of Relationship Marketing on Bangladeshi SME performance and the Moderating Role of Gender: A Multi-Group Confirmatory Factor Analysis. In International Postgraduate Research Conference (2nd IPRC 2019), Universiti Sultan Zainal Abidin (UniSZA), Gong Badak Campus, Kuala Terengganu, Malaysia, December.
56. Saad, S., Seduram, L. A., & Sade, A. B. (2019). The Effect of Relationship Marketing on Bangladeshi SME performance and the Moderating Role of Digital Media: A Multi-Group Confirmatory Factor Analysis. In International Postgraduate Research Conference (2nd IPRC 2019), Universiti Sultan Zainal Abidin (UniSZA), Gong Badak Campus, Kuala Terengganu, Malaysia, December.
57. Salam, S., & Hoque, A. S. M. M. (2019). The Role of Social Media and Effect of Relationship Marketing on SME Performance in Bangladesh: Multi-Group CFA. Asian People Journal (APJ), 2(1), 12-31.
58. Seznec, J. F., & Kirk, M. (eds.) (2011). Industrialization in the Gulf: A Socioeconomic Revolution, Center for Contemporary Arab Studies, Georgetown University/Routledge.
59. Shebeb, B. (2007), Productive Efficiency in Bahrain Economy, Middle East Journal of Economics and Finance, 1(1), 1-14.
60. Shebeb, B. (2015), Analytical Decomposition of Labor Productivity Growth in Construction Industry of Bahrain, Journal of Socialomics, 5(1), 1-5. https://doi.org/10.4172/2167-0358.1000137
61. Shebeb, B., & Al-Saleh, N. (2011), Economic Growth in Bahrain: The Contribution of Multifactor Productivity, International Journal of Economic Issues, 4(2), 2011.
62. Siddiqui, B. A., & Hoque, A. S. M. M. (2018). Innovation Performance of Internet Service Providers in Bangladesh: The Sway of Corporate Entrepreneurship. International Journal of Entrepreneurship and Small & Medium Enterprise (IJESME), 5, 1-14.
63. Siddiqui, B.A., Awang, Z., & Hoque, A.S.M.M. (2019). SNS Addiction of Generation Y: Can Religiosity Control Deviant Behavior? In International Postgraduate Research Conference (2nd IPRC 2019), Universiti Sultan Zainal Abidin (UniSZA), Gong Badak Campus, Kuala Terengganu, Malaysia, December.
64. Siddiqui, B.A., Hoque, A.S.M.M., Awang, Z., Jeko, N. A., & Rahman, A. (2019). Marketing Mix Effect on Impulse Buying Behavior: An Empirical Analysis on Bangladeshi Customers. In International Postgraduate Research Conference (2nd IPRC 2019), Universiti Sultan Zainal Abidin (UniSZA), Gong Badak Campus, Kuala Terengganu, Malaysia, December.
65. Soumitra Dutta, D. B. (2012). Stronger innovation linkages for global growth. In S. Dutta, The Global Innovation Index 2012 (pp. 67-71). France: INSEAD and the World Intellectual Property Organization.
66. Stverkova, H.; Pohludka, M., 2018, Business Organisational Structures of Global Companies: Use of the Territorial Model to Ensure Long-Term Growth. “Social Science”, 7, 98.
67. The World Bank, I. a. (2012). Middle East remains least demanding Tax Framework. Washington DC: The World Bank.
68. The World Bank, IFC, PwC. (2012). Paying taxes 2013: The global picture. Washington DC: The World Bank.
69. UNDP, RBAS. (2005). The Arab human development report 2004. New York: UNDP, RBAS.
70. Wells, W., and Tigert, D. (1971). Activities, interests, and opinions. Journal of Advertising Research,
11, 27-35.
71. Weyer, S.; Schmitt, M.; Ohmer, M.; Gorecky, D. Towards Industry 4.0-Standardization as the crucial challenge for highly modular, multi-vendor production systems. IFAC-PapersOnline 2015, 48, 579– 584.
72. World Bank Group and PwC. (2013, 19 November). Paying taxes 2014: The global picture. Washington DC: The World Bank.
73. Yu, C. S. (2011). Construction and validation of an sale tax collection efficiency instrument. Internet Research, 21(3), 214-235.
Downloads
Published
Issue
Section
License
This work is licensed under a Creative Commons Attribution 4.0 International License.
You are free to:
- Share — copy and redistribute the material in any medium or format for any purpose, even commercially.
- Adapt — remix, transform, and build upon the material for any purpose, even commercially.
- The licensor cannot revoke these freedoms as long as you follow the license terms.
Under the following terms:
- Attribution — You must give appropriate credit , provide a link to the license, and indicate if changes were made . You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
- No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
Notices:
You do not have to comply with the license for elements of the material in the public domain or where your use is permitted by an applicable exception or limitation .
No warranties are given. The license may not give you all of the permissions necessary for your intended use. For example, other rights such as publicity, privacy, or moral rights may limit how you use the material.
