‘LMRA fee reduction unjust’

A businessman in the Kingdom yesterday said that the government’s ‘unilateral’ decision to reduce the Labour Market Regulatory Authority (LMRA) fee should not have been limited to Small and Medium Enterprises (SMEs).

Welcoming the move, Nass Corporation Vice Chairman and Bahrain Chamber of Commerce and Industry (BCCI) Board member Samir Nass opined that the decision should have been taken with the larger picture of the economic situation in mind.

This reduction and limiting it to SMEs will not solve the issue and it is only departmentalising big, small and medium employers, while the sector which is hurt financially is being ignored, said Mr Nass.

There are companies with five or less employees with much higher income like the jewellers, goldsmiths and real estate owners, who will now enjoy the benefit of the fee reduction along with their high income, he said.

He cited that a small time contractor with more than 50 employees is being exposed to a higher risk than the SMEs by being burdened with the higher LMRA fee.

Mr Nass also pointed out that there were no discussions on the matter prior to the decision with the business community and neither were they advised on the same.

He said that the BCCI would discuss the matter in its community to gauge their response, prior to proceeding with the matter to the officials.

Meanwhile Jafcon Consultants for Productivity Improvement Chief Executive Officer Dr Akbar Jaffari and BCCI Board member and Young Entrepreneurs Committee Head Khalid Al Ameen welcomed the decision describing it as a ‘good and wise move’.

This reduction doesn’t mean an impact on the revenues of the LMRA, while it lessens the pressure on the SMEs, which are the backbone of the country’s economy, said Dr Jaffari.

It is ideal to be dealing with this sector detached from the rest as their conditions are different from others and they are mostly one-man ownership type and have suffered much during the past two to three years due to market fluctuations, he said.

So, this new move is friendly, modern and progressive and will give a lot of breathing space for the SMEs, he added.

Dr Jaffari noted that the community expected more such legislations to protect the SMEs as they are susceptible to changes in the environment and are hypersensitive.

Commenting on Mr Nass’s views, Mr Jaffari said that these kinds of ‘claims’ have not been proven yet and the fee that the bigger employers pay are nominal and justified.

The higher fee has not affected them in general, with the exception of a few odd cases, he added.

Describing the move as ‘positive’ Mr Al Ameen said the decision was a ‘fair call’.

“A total of 41,000 SMEs will benefit from this move. They constitute nearly 78 per cent of the Bahraini businesses, which is not a mean number,” he said.

The move will encourage the growth of family businesses in the country and in turn will reflect on the economy, he asserted.

Mr Al Ameen differed with Mr Nass pointing out that in one way or the other money is circulated in the economy and gets back to the big businesses.

“The money that is deducted will be utilised by SMEs in training the national workforce and to improve the technical, technological and human skills of the companies, which will reflect in terms of revenue going back into the bigger economy,” he explained.