In 2019, the Kingdom of Bahrain introduced Value added Tax (VAT) at an initial rate of 5% as part of the country’s broader efforts to diversify its economy, with the rate subsequently increased to 10% in 2022. Therefore, this Study aims to investigate the economic implications of increased VAT rates from the perspective of consumers. The data was collected through questionnaires distributed among consumers in Bahrain. The survey responses were analyzed using ANOVA and regression tests, which resulted in a positive correlation between increasing VAT rate and consumer behavior such as consumer spending. Moreover, the regression results show that there is statistically a significant relationship between our variables; 77.4% and 77.3% respectively. The study recommends gradual VAT increases, public awareness campaigns, revenue diversification, and regular reviews to ensure economic stability and protect low-income households.