Qatar Confirms VAT, Hints at New Sin Tax

June 20, 2016 Taxation in Qatar

DOHA – A raft of new taxes in Qatar are expected to hike annual inflation in the country to as much as 3.8 percent.

In a new report released over the weekend the Ministry of Development planning and Statistics of Qatar announced that a new VAT will be introduced in 2018, and that the government is also now considering implementing a “sin tax” on products deemed to be harmful.

The new VAT will come into effect in 2018, and will be levied at a rate of 5 percent, in line with the VAT to be introduced across the all countries in the Gulf Cooperation Council.

The VAT could also be accompanied by a yet-to-be-detailed “sin tax” on tobacco, sugar sweetened soft drinks, and fast food.

Along with the new taxes, the government will cut back on the subsidies offered on water and electricity.

Collectively the measures are expected to hike the countries inflation rate from approximately 3.4 percent to 3.8 percent over the course of the 2018 year.

The increased tax obligations and reduced government spending are aimed at helping address the national budget deficit, which is now expected to continue well into 2018.

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