The Qatar Cabinet has recently approved a draft law to implement new selective taxes on harmful goods and luxury goods.
20 February 2017| Last updated on 13 June 2017
The Qatar Cabinet has recently approved a draft law to implement new selective taxes which are likely to start in the upcoming months.
The taxes would be issued on goods that are harmful to your health and the environment as well as some luxury goods.
This is not the first time we hear of such a law, as officials had previously discussed implementing “sin taxes” that would be applicable to tobacco, fast foods and soft drinks.
Qatar will also be implementing a value-added tax (VAT) in 2018 as part of a unified GCC agreement.
SEE ALSO: GCC coutries to implement VAT in 2018
As the country continues to seek ways to produce additional revenues away from oil, the costs of living for residents will inevitably increase.
While the primary reason is to overcome the low oil prices, there are also secondary reasons behind how authorities are choosing the methods.
Healthcare costs have been steadily on the rise in the country. As Qatar subsidises much of the healthcare for its citizens, the costs of treating preventable diseases are taking a toll.
Obesity and diabetes are one of the most common diseases in the country and the number of individuals affected continues to grow. Officials hope that by adding fees on goods that contribute to such diseases, it will reduce the consumption.
The healthcare costs are estimated to be doubled by 2020, reaching $8.8 billion per year.
Debt in Qatar is a significant problem, as 75 per cent of the population is in debt. By putting a tax on luxury goods, the government is hoping to urge people to stop extravagant spending and no longer purchase things that aren’t within their means.
In today’s society, there are constant pressures to show off the latest brands and the most expensive gifts, which could contribute to pushing individuals into further debt.
It remains unclear whether these methods will be an affective deterent or will simply just push people more into debt if they continue their spending habits. The exact amount of this sin tax has not been revealed yet.