(Bloomberg) --Qatar, one of only two Arab economies in the Gulf region without value-added tax, will likely wait longer before imposing the levy.
âœWe will look to the right time to apply such taxes,â Finance Minister Ali Al Kuwari said in an interview Wednesday with Bloomberg Television at the Qatar Economic Forum in Doha. âœTax reforms are part of our plans.â
More than half a decade since signing an agreement with neighboring states that requires all six members of the Gulf Cooperation Council to introduce VAT, Qatar and Kuwait are alone in not following through. By contrast, Saudi Arabia already tripled its VAT rate to 15% in 2020 to bolster state revenue when oil prices slumped.Â
Last year, Al Kuwari said his country hasnâ™t yet chosen when to go ahead and was wary of adding an extra burden on consumers in the midst of the pandemic. A KPMG report earlier this year said Qatar was expected to impose a VAT regime at a rate of 5% during 2022.
One reason the approach is lacking in urgency is that the gas-rich nation is among the biggest beneficiaries from higher energy prices and is on track to run a large budget surplus. While cost pressures are muted in the region, inflation is picking up in Qatar, the host of this fallâ™s soccer World Cup.
Al Kuwari said Qatar isnâ™t isolated from global tailwinds including price pressures, warning that results may not be too favorable âœwhen you apply taxes in such inflationary cycles.â
Qatarâ™s Ministry of Commerce and Industry, Qatar Investment Authority and Investment Promotion Agency Qatar are the underwriters of the Qatar Economic Forum, Powered by Bloomberg. Media City Qatar is the host organization.
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