Tax Awareness in Qatar
Attending a tax awareness session is an integral step for anyone seeking to understand the intricacies of the inner workings of such a system and how governments implement fiscal policies. It was for this very reason that I decided to attend such a session courtesy of the College of Business Studies and Economics at the University of Qatar. Tackling this particular subject was Dr. Mahmoud M. Abdellatif Khalil who also doubles up as Director at the Center for Entrepreneurship. The Economics of Taxation was one of the primary issues of concern that the speaker would discuss to raise tax awareness in Qatar. In this comprehensive session, taxation, economics, their functions, criteria for a functional taxation system, tax incidence, fiscal policy and frameworks implemented in Qatar were all presented. The idea was to provide the audience with a detailed presentation of all facets of taxation in Qatar that would enable persons to understand how it functioned at any particular moment. In this essay, I will provide an in-depth case study report of tax awareness in Qatar and its function.
Taxation is a common phenomenon among most countries across the world and acts as a source of revenue. In essence, tax is an obligatory financial charge that all citizens in a particular country have to pay to fund the government and all its public expenditure programs. It’s a mandatory levy that has to be paid by all, with the law often taking its course whenever an individual fails to live up to this requirement. Common among most countries is a taxation system where a nation’s needs are catered for using the tax payer’s money. Using Law No. 21 of 2009 the Qatari government receives a guideline that provides various regulations together with the manner in which the tax regime is administered (“Qatar: Law No.21 of 2009 issuing the Income Tax Law,” n.d.). Local source income is one of the typical taxes in Qatar levied on all income generating entrepreneurial ventures in the country. Corporate income tax is levied on all profits made by foreign nationals with establishments in the country. According to Qatari laws and regulations, the taxable income for any individual residing in the country is determined by subtracting all losses and deductions from a steady gross income. For the tax to be deductible, it has to be bolstered by documentary evidence, be about a taxable year, expenses to exempt income and any breaches of Qatari law.
Moreover, I was also lucky enough to gain insight into Value Added Tax (VAT) and its implementation in Qatar. In essence, it is a consumption tax imposed at every advanced stage of the production. Additional costs are also placed at the retail sale meant to cater for the price of production incurred by the producers. Value Added Tax (VAT) is a relatively new development in Qatar as a member of the Gulf Cooperation Council (GCC). Its introduction came through the signing of the Value Added Tax (VAT) Framework Treaty. A profound effect will be felt in Qatar particularly in financial services such as accounting. A consequence of the implementation of the Value Added Tax (VAT) policy in Qatar is that the sell to receive and subsequent procure to pay processes will soon be adversely affected, impacting the importation of goods and the raising of invoices during the accounting process. An inability to sell all the locally available products and service will lead to revenue shortfalls that impede any form of fiscal development.