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Sun 19 Jun 2016 04:21 PM

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VAT, tobacco tax 'to push up inflation', says Qatar ministry

Consumer price inflation said to rise to 3.4 percent over 2016-2018

VAT, tobacco tax 'to push up inflation', says Qatar ministry

Qatar’s consumer price inflation will increase with the proposed introduction of value added tax (VAT) and other taxes on harmful items such as tobacco, according to an official report.

The Ministry of Development, Planning and Statistics’ Qatar Economic Outlook 2016-2018 said consumer price inflation is expected to increase gradually from 2.7 percent to 3.4 percent over the period.

The strength of the US dollar, subdued commodity prices and a possible weakening of demand growth have served to lower forecasts reported in December’s outlook, the report said, while a 30 percent increase in fuel prices as well as a new oil price formula to determine prices in future is expected to push inflation up.

Partial removal of subsidies resulting in increased utility prices, as well as the introduction of taxes including a Gulf-wide VAT – planned for 2018 – and other taxes including a proposed tobacco tax may hike up inflation further, the report said.

Gulf Times quoted development planning and statistics minister Dr Saleh bin Mohamed Al Nabit as saying consumer price inflation was “expected to edge up from the muted levels of 2015”.

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