VAT Introduction in a rentier Gulf Council Country (GCC). Mapping the process: Challenges and Measures, Applications and Implications— the case of Bahrain

The literature of taxation has extensively covered the study of tax designs, compliance problems and policies in various economies. While some have linked different disciplines to taxation to understand the impact of taxes on a country’s economic development, others have made direct connections between taxation and the social contract. Yet, a lack of empirical evidence persists regarding how to construct a tax administration in light of a nation's economic and societal characteristics, how these factors affect the creation of a tax system and are subsequently affected by the developed tax system and its associated process. One of which is the VAT, as there are no enough context specific studies that reflect differences between standard approach VATs and real-world VATs. This thesis provides a context specific study through investigating the establishment of the value-added tax (VAT) and its related process for the first time in one of the GCC member countries which is Bahrain. Given Bahrain’s rentier economy, examining the implementation process and its various phases occurs in the context of rentierism. The study identified stakeholders (actors) who have participated in the process and whom it has affected, to gain a thorough understanding of the process from their perspectives and better portray the implementation process through employing the ANT. The key stakeholders included: the Business sector, tax consultants, training and education institutions and the administration. The researcher utilised a constructivist paradigm to view and reflect upon the process, from the perspective of various stakeholders, employing a mixed qualitative methodology that relies on archival data and in-depth interviews (n=28). The results primarily demonstrate that establishing and implementing a tax system (VAT) required a distributed action derived by a socio-material assemblage. Thus, this thesis highlights the establishment and implementation of a tax system as an interconnected process that necessitates involving different human and material resources, to deliver a smooth process and an optimised system. The study reflected the differences between standard approach VATs and Bahrain’s real VAT application that met the country’s needs and characteristics. Further, while it was noted that the rentierism concept guided the design and implementation of the VAT, the approaches adopted by the state throughout the process have positively contributed to the system implementation, stressing the importance of state-society interactions in implementing the tax system and its positive reflections on the social contract.