No VAT or income tax, but price of cigarettes, sugary drinks to rise in 2019

Qatar’s Ministry of Finance has presented its budget for the year 2019, and it features a small rise in government spending as well as the first surplus in three years.

The budget, which was announced yesterday, comes on the back of stable oil prices and a new tax that was implemented, reported Reuters.

The 2019 Budget is designed to maximise efficiency in current expenditure while maintaining the necessary allocations for the completion of major approved projects which will contribute to the #sustainable development targets of #Qatar National Vision 2030. pic.twitter.com/gIrBykneQ6

— مكتب الاتصال الحكومي (@GCOQatar) December 13, 2018

The rising energy prices are expected to give Doha a much higher income in 2019 despite the imposition of the illegal siege by neighbouring countries. 

Qatar’s spending is projected at QR206.7bn in 2019, up about 1.7% from the budget plan in 2018. That contrasts with a projected 20.5% jump in revenue to QR211bn,

HH the Amir issued today Law No. 23 of (2018) approving the State's general budget for the year 2019. The law is effective as of January 1st, 2019. #QNA pic.twitter.com/namZ1700vd

— Qatar News Agency (@QNAEnglish) December 13, 2018

However, the country will not levy any value-added tax (VAT) in 2019 and neither will it impose income tax on citizens and residents.

Saudi Arabia and the UAE had introduced 5% VAT this year, but Qatar said it wanted more time to assess the effects of VAT. However, it will establish a brand new General Tax Authority (GTA), reported Gulf Times.

The GTA will be established as a separate entity under the supervision of the Ministry of Finance. The GTA will be in charge of the implementation of all tax laws.

Doha will grant further exemptions to vital economic sectors and will not impose a tax on investments in shares and profits, but will impose selective taxes on health-damaging goods from the beginning of 2019, according to the Ministry of Finance.

“The Selective Tax law is designed to impose taxes on certain health-damaging goods, and it will be implemented by the beginning of 2019. The law includes a 100% tax on tobacco and its products and energy drinks and a 50% tax on sugary drinks,” read a statement, according to The Peninsula.

The budget focuses on providing necessary funds for development of new housing areas for nationals, enhancing food security projects, and the establishment of infrastructure and facilities in free zones, special economic zones, and industrial and logistics zones, reported Qatar Tribune.
Allocations to salaries and wages have increased by 9.4% to QR57.1bn compared with QR52.2bn in 2018. This rise is the result of increasing hiring to secure required staff to operate several newly completed projects, especially in the education and health sectors.

Despite a drop in allocations, major projects sector continued to represent the largest share of expenditure at 43.3%. The focus continues to be on completing projects in leading sectors including healthcare, education and transportation, along with those related to the hosting of 2022 FIFA World Cup.

QR22.7bn has been allocated to the health sector, and it will be used to improve health care services include expansion in Hamad Medical Corporation facilities, National Laboratories premises, completion of four new health centres and commencement of construction of five new health centres.