Doha, 13 December 2018
QATAR’S general budget for 2019 will achieve a surplus of QR 4.3 billion, its first budget surplus in three years, the Ministry of Finance announced on Thursday.
The surplus is a result of higher energy prices in international markets along with increasing non-oil revenues, the ministry said.
The 2019 budget assumes an average oil price of $55 per barrel compared with $45 per barrel in the 2018 budget.
Revenue is anticipated to reach QR 211 billion, up 20.5 percent compared with the budgeted revenue of QR 175.1 billion in 2018, the ministry said. Expenditure is set at QR 206.7 billion, up by 1.7 percent compared to the QR 203.2 billion budgeted in 2018. Accordingly, the budget is expected to achieve a surplus of
QR 4.3 billion.
Based on the directives from the Amir Sheikh Tamim bin Hamad al Thani, the 2019 budget is designed to achieve efficiency in current expenditure while
maintaining the necessary allocations for the completion of major approved projects that contribute to the sustainable development targets of Qatar 2030 Vision.
These span economic, social, human and environmental development.
The budget also focuses on providing the necessary funds for the 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.
Allocations to salaries and wages have increased by 9.4 percent to QR 57.1 billion compared with QR 52.2 billion 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. Hiring also increased in the defence, security and public safety sectors, the statement said.
Expenditure allocated to major projects declined by 3.6 percent to QR89.6 billion, compared with QR 92.9 billion in 2018. This decline is the result of the completion of some major infrastructure projects. These allocations are projected to continue declining gradually during the coming few years, as more projects are completed.
Despite the drop in allocations, major projects continued to represent the largest share of expenditure at 43.3 percent. The focus continues to be on completing projects in leading sectors including healthcare, education and transportation, along with those related to the hosting of FIFA World Cup in 2022.
In 2019, the ministry said, new projects with a total cost of QR 48 billion are expected to be awarded out of a portfolio of committed projects worth QR 421 billion. These new projects will boost economic growth in the country, especially in non-oil sectors.
Healthcare Sector The allocation for the health sector is QR 22.7 billion, representing 11 percent of the total expenditure.
Major projects to improve health care services include expansion in Hamad Medical Corporation facilities, National Laboratories premises, completion of four new health centres in Al Wajbah, Meither, Qatar University and Alwaab, commencing construction of five new health centres in South of Wakrah, Al Mashaf, Al Saad, Al Khor and Ein Khaled.
Education Sector The education sector is allocated QR 19.2 billion in the budget, representing 9.3 percent of total expenditure. Major projects in the education sector include facilities for the medicine, pharmacology, University, completion of other Qatar University facilities like student housing, new lecture halls and Al
Rawdah premises, expansion of community college, Ministry of Education headquarters, two new schools for Qatar Academy and establishment of other new schools with a total cost of QR6.8 billion over five years.
Infrastructure Projects Infrastructure projects are allocated QR 33 billion, 16 percent of total expenditure. The sectors covered include road, water, electricity
and sewerage networks, along with other public facilities. The main infrastructure projects under construction include Al Bustan highway, Al Rayyan-Dukhan
road, Al Khor coastal road, Al Furousiya road, North road, Wakrah expressway, Wakrah bypass, Lusail expressway, expansion of the water and electricity networks and development of new housing areas for nationals.
The 2019 budget includes allocations for the development of new housing areas for nationals, including the provision of roads, water, electricity and sewerage networks.
The plan to provide new housing areas for nationals will cost QR 12 billion over 5 years. New land areas will be distributed to nationals gradually after the completion of required infrastructure, according to the approved timetable.
Transportation and Communications Sector The transportation and communications sector is allocated QR 16.4 billion, 7.9 percent of total expenditure in 2019. Most of the allocations will go to the Rail project, Doha Metro, while QR 1 billion has been allocated for the expansion of Hamad International Airport as part of
a wider plan worth QR 10 billion to enhance the capabilities of the airport to offer the best aviation and cargo services. There are also funds assigned to Qatar Public Transportation Program, which is expected to cost QR 3 billion in 2019-2021.
The main transportation projects under construction include Doha Metro with allocations of QR 12 billion, Lusail light train, Qatar Public Transportation Program and Hamad International Airport expansion.
No Tax on Income of Citizens and Residents
QATAR would delay plans to introduce a value-added tax (VAT), initially anticipated for this year. “VAT will not be imposed in 2019 and its effects are being assessed,” Ministry of Finance said in a statement on Thursday.
Qatar also issued a set of taxation laws including income tax, selective tax and decision to establish the General Tax Authority. The new tax laws are part of
the process of developing Qatar›s financial system to keep up with international best practices and enhance economic growth and financial stability, due to the importance of the taxation system in financial policies in most countries around the world.
The Income Tax law of 2018 amends previous income tax laws. The income tax on foreign companies working in Qatar or on the stake of foreign partners in joint
ventures remained at the same level, which is a 10 percent flat rate on profits.
The amendments focused on reforming administrative and procedural systems, supporting tax compliance by taxpayers and granting greater flexibility in granting tax exemptions to institutional activities in key economic sectors and economic zones to support growth and economic diversification, thereby
encouraging and attracting foreign investment.
The law stipulates that the salaries and wages of citizens and residents shall not be subject to any tax. It also grants exemptions for equity shares listed on a recognised stock exchange, profits of banking deposits and companies working in the agricultural sector and fisheries.
Marine and aerial transportation are also exempted under the principal of reciprocity.
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 percent tax on tobacco and its products and energy drinks, and a 50 percent tax on sugary drinks.
The General Tax Authority has been established as a separate entity, under the supervision of the Ministry of Finance, and will be in charge of the implementation of all tax laws.
The GTA’s mandate includes implementation of all tax laws and setting up all related bylaws, procedures and instructions. Reviewing and assessing tax return forms submitted by all establishments and the collection of taxes from subject entities.
The authority will represent Qatar in relevant international and regional organisations as well as at international conferences and events. It will also sign agreements with other countries regarding the prevention of double taxation to encourage economic cooperation and joint investments.