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Qatar Edges Towards Implementation Of VAT And Sin Taxes.


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A draft legislation has been approved by the cabinet of Qatar to implement two new taxes in the country. It includes a new selective tax on fast food, luxury goods and other items, and a 5 percent value-added tax (VAT) targeted at businesses.

Both taxes come under GCC-wide agreements hoping to encourage revenue collections for countries across the Gulf. The Finance ministers of GCC will be meeting in Bahrain to discuss the rollout of the taxes.

Officials said that selective taxes would be “imposed on goods harmful to human health and the environment,” including specific luxury items. It is likely to be implemented this year. Meanwhile, the VAT is being prepared to roll out in 2018. It is a compulsion tax with certain food items being exempted along with the cost of education, healthcare and social services.

Local business have been informed well in advance to prepare for VAT. It is speculated that the tax may slow down growth in small and medium sized companies sector.

“These firms will need to change their IT, HR, procurement, finance and marketing processes, and they will need to have auditors check and approve their books,” said Alexis Antoniades, an associate professor at Georgetown University’s School of Foreign Service in Qatar.

The cost of living will probably go up when these taxes come into force and according to the International Monetary Fund, inflation will be more than double from 2.6 percent currently to 5.7 percent by 2018.

Customers are asked to stock up before import taxes on spirits increase by two folds. Even eating out could dig your pockets deep as meals will be a bit expensive.