His Excellency (H.E.) Ahmed bin Issa Al-Mohannadi, President of the General Tax Authority, confirmed that the authority does not intend to impose a tax on income, and that the value-added tax, which has been widely circulated recently, is still under legislation.
In a comprehensive dialogue with Al Sharq about the plans, strategies and objectives of the authority, which is one of our most recent national institutions related to economic development, the head of the authority explained that the general tax authority seeks to reduce the burden on taxpayers, especially those who have small or micro commercial activities in accordance with the provisions of the law and regulations Executive.
He added that the goal of applying the simplified tax declaration form is to facilitate the submission procedures, so that the taxpayer has the option of self-presentation without the need for an accredited audit office, so that the taxpayer does not have to pay additional amounts to audit offices, which enhances the principle of tax compliance by taxpayers, as the Those companies that qualify for the simplified return are exempt from income tax by law.
H.E. Ahmed bin Issa Al Mohannadi spoke about the adoption of effective media plans to spread tax awareness to taxpayers and the public, pointing out that gradual awareness-raising was undertaken to understand the concept of tax in its correct form. The following is the partial text of the dialogue that deals with various aspects related to the Authority's objectives and the interests of the public and companies.
Taxes are considered one of the important sources of revenue in the general budget, as they constitute a resource for the development of services and the contribution of companies and the private sector to development, but many entities are exempt from taxes. What is the legal and economic vision of the concept of tax in Qatar?
Tax is one of the most important tools for diversifying the country's sources of income. From a legal point of view, and in line with the legal principle (no tax except in the text of the law), the State of Qatar has issued Income Tax Law No. (24) of 2018 and Selective Tax Law No. (25) of 2018 regarding selective tax, and the General Tax Authority, which is the competent authority, undertakes this. implementation of these laws.
The tax, in general, is a sum of money imposed by the government on companies, and it is one of the sources of public revenue, as it is redistributed between sectors and government services provided to individuals to achieve equality and economic stability in the country.. Since the tax aims to diversify the sources of state income, exemptions are considered by the state. As a kind of support and development of other economic sectors in order to develop them and encourage investments in them.
The General Tax Authority is the authority responsible for managing tax transactions in the State of Qatar. What is the authority’s vision and mission to contribute to the development of our economic system and the efficiency of the operating environment?
Our vision is to promote “a rational tax system that contributes to achieving economic diversification and promoting sustainable development.” Our mission aims to activate the performance of tax operations in an effective manner that enhances the economy and contributes to sustainable development by establishing the values of voluntary compliance in an integrated tax system that includes the public and private sectors. Finally, the Authority's values come with the help of achieving its vision and mission with a set of institutional values to enhance the professional ethical commitment towards the segments of society. They are as follows: Transparency and integrity: in all internal and external transactions through the development and application of governance systems in the authority, objectivity: through dealing with abstract facts and commitment to the work’s institutional, goals and systems, cooperation and partnership: with governmental and non-governmental agencies in the application of the tax work system, creativity and excellence Innovating new ideas and mechanisms that lead to the continuous development of tax work systems.
The economies of emerging countries view taxes as a burden and an obstacle to the growth and development of companies, how do we strengthen the relationship between the productive sector and tax authorities?
Taxes are an essential part and a major income in all countries of the world, especially developed countries, which are achieving sustainable economic growth despite the presence of tax rates higher than the tax rate in Qatar. It is necessary that the tax rate be compatible with the profitability and competitiveness of the sector, as there are other factors of interest to the investor other than the tax, such as the cost of business, production costs, labor and other costs that affect the profitability of the economic sector.
What is the Authority’s contribution to enhancing the investment environment and improving the general economic climate in the country?
Taxes in Qatar are among the lowest in the world, in order to encourage the investment environment. The presence of taxes also enhances the state's financial solvency and diversifies its sources of income, which enhances its financial position, and creates a safe and attractive investment environment at the same time.
Amiri Decree No. 77 defined the powers and tasks of the General Tax Authority, what are the most prominent of these tasks, and did you suggest new powers or updates to these tasks?
Electronic taxation to facilitate taxpayers, work to spread and deepen tax culture and voluntary commitment by taxpayers, follow systems and procedures that reduce administrative costs and facilitate tax compliance and represent the state in regional and international conferences and meetings whose activity is related to tax affairs, in coordination with the competent authorities. As for proposing new powers or updates, the Emiri decree assigned a comprehensive jurisdiction to the authority in the tax field to achieve its objectives. The authority also has reform projects in the direction of more coordination between tax-related legislation. As for proposing new powers or updates, the Emiri decree assigned a comprehensive jurisdiction to the authority in the tax field to achieve its objectives. The authority also has reform projects in the direction of more coordination between tax-related legislation. As for proposing new powers or updates, the Emiri decree assigned a comprehensive jurisdiction to the authority in the tax field to achieve its objectives. The authority also has reform projects in the direction of more coordination between tax-related legislation.
The tax culture appears to be very limited in society, given the exemption that the state applies to large sectors of the economic sectors and groups of society. Why are there no awareness campaigns to spread and strengthen this culture after the formation of the Tax Authority?
Since its establishment in 2018, the General Tax Authority has gradually increased the educational awareness of the community, as tax culture is a new culture for society in the State of Qatar, and therefore the goal of gradual awareness is to provide an opportunity for the community to understand the concept of tax in its correct form, and since we have reached this year To the large numbers of taxpayers who have registered with the authority and submitted their tax returns, we believe that the plan adopted to spread gradual awareness has succeeded by all standards. We are still running many advertising campaigns to deliver the main messages of the most important provisions of the Income Tax Law and the Selective Tax Law.
What are the types of taxes currently applied, what are the entities that are subject to them, what are the excluded categories and why were they excluded?
Currently, there are two types of taxes that are already applied within the State of Qatar, which are the income tax: It is applied annually on the total income subject to the income of foreign shares in companies and non-company taxpayers, and of course there are exempted categories according to the detail provided in Law 24 of 2018 and the purpose of their exception is economic reasons One of the most important of these exemptions is, for example, but not limited to, the total income of Qatari natural persons residing in the country.
In addition to the total income of legal persons residing in the country and wholly-owned by Qataris and gross income from agricultural or fishing activities.
In addition to the excise tax: it is applied to excise goods such as (soft drinks 50%, energy drinks 100%, tobacco of all kinds 100%, and goods of a special nature 100%). As for the entities that are subject to the excise tax, the import and local production of excise goods are subject to them, and as a consumption tax, the final consumer is the one who bears the burden of the tax.
According to what was stated in Law (25) of 2018 regarding selective tax from Article 13, the following are exempted from tax:
1. Diplomatic and consular bodies, international organizations, heads and members of the diplomatic and consular corps accredited to the state, on the condition of reciprocity, in accordance with the controls issued by a decision of the Minister.
2. Excise goods that are accompanied by travelers coming to the country, provided that they are not of a commercial nature, and that they meet the conditions and controls specified in accordance with the provisions of the aforementioned Customs Law.
3. Other Excise Goods to be determined and the conditions for exemption issued by a decision of the Council of Ministers based on a proposal by the Ministers.
Have small and medium-sized companies been taken into account within the categories covered by the tax, or are they excluded by the nature of their activity?
Indeed, small and medium-sized companies have been taken into account, as there is a special section for them within the Income Tax Department. The aforementioned law has taken into account the tax exemption for the total income arising from craft activities that do not use machines, and whose total income does not exceed two hundred thousand riyals per year, and the average number of Its workers in the tax year are three workers, which are practiced through one facility.
Some countries have recently talked about the value-added tax, and Qatar was among those who reserved this tax as part of its strategy, which does not see the need to impose new taxes. Do you still adhere to the same position?
Qatar has no reservations about this tax, which emerged through a unified Gulf value-added agreement for the Gulf Cooperation Council, and Qatar is part of that agreement, and there is no reservation, but the matter is still under legislation.
The electronic portal you have launched the electronic tax portal aimed at providing the best services and making them available in an effective and easy way to many entities. What is your evaluation of this portal and the services it provides?
The General Tax Authority has launched an electronic tax portal since July 2020, with the aim of enabling various entities, entities and individuals to simplify and facilitate the fulfilment of their tax obligations on the decision to register, submit returns and pay taxes as well as submit their requests to the authority, inquiries and suggestions regarding their tax treatment. The authority is working continuously and gradually to add the services it provides to become fully electronic, in line with Qatar Vision 2030, which aims to completely digitize administrative services and provide all mechanisms and guarantees to achieve them.
These services are provided by the authority through the "electronic tax" portal, taking into consideration the modern standards and controls in order to facilitate and simplify them and enable the auditors to follow up on their requests on a timely basis, and to find channels through the system to communicate and inquire with the concerned department of the authority.
You recently announced the beginning of the application of the simplified tax return form, which must be submitted by companies and permanent establishments that are exempt from tax, owned by Qatari citizens and from the Gulf Cooperation Council countries, and whose capital is less than one million riyals and annual revenues are less than 5 million riyals, What are the objectives of this decision, and the consequences thereof?
Of course, the General Tax Authority always seeks to reduce the burden on taxpayers, especially those who have small or micro commercial activities in accordance with the provisions of the law and the executive regulations, and the goal of applying the simplified tax return form is to facilitate the application procedures, so that the taxpayer has the option of self-presentation Without the need for an accredited audit office, so that the taxpayer does not have to pay additional amounts to the audit offices, which enhances the principle of tax compliance by taxpayers, as those companies eligible for simplified declaration are exempt from income tax under the law.
The excise tax is applied to a number of unhealthy goods, starting from the year 2019, what is the outcome of this tax, and have you added new lists to goods included in this category?
Excise tax revenues for the year 2019 amounted to 1,200,000 Qatari riyals. It should be noted that the objective of the excise tax is to reduce consumption of harmful goods, which reduces the burden on the health sector of the state, and accordingly, a study is currently underway to expand the scope of the selective tax on unhealthy goods.
The public hears about different types of taxes, such as selective tax, withholding tax, and income tax. What is the nature of these types and what are the categories that apply to them locally?
Excise tax is a consumption tax that is applied to excise goods (soft drinks 50%, energy drinks 100%, tobacco of all kinds 100%, goods of a special nature 100%), at the point of import and local production. As for deduction at source: they are the commissions payable under agency, mediation or commercial representation agreements, which were realized outside the country for activities that took place there.
As for the income tax, it is a tax imposed on an annual basis on the total taxable income of the taxpayer, arising from sources in the state during the previous tax year, with the exception of: interest and bank returns realized outside the state provided that they result from amounts arising from the activity of the taxpayer in i
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