Smokers in Qatar faced a rude awakening on January 1. For the New Year, the government decided to increase the price of cigarettes, and the amount is considerable. Indeed, in tobacconists throughout the country, a packet of cigarettes that cost 3.75 Euros on December 31st cost 10 Euros the next day. The price increase is a result of dizzying tax increases on tobacco, and that’s not the only bad news: alcohol and sodas have also been affected by the New Year’s taxes.
At the end of 2018, the finance minister assured citizens that there would be no tax increases for the aforementioned products. Nonetheless, any product deemed dangerous to public health was surcharged at the start of the New Year—over a 100% price-increase for tobacco and a 50% increase for sugary drinks.
The reasons for the tobacco surcharge
The new tax regulations are in accordance with the country’s current politics, which are ostensibly enforced to improve public health in Qatar. However, this new tax will also have financial benefits for the small country in the Middle East. Thanks to the new taxes, the budget surplus for the year has been revised, and should go up to 4.3 billion Qatari Riyals, or 1.3 billion Euros.
It is also important to note that Qatar has been selected to organize the 2022 FIFA World Cup. This event obviously promotes tourism, and many visitors will be consuming alcohol and tobacco during their stay. By increasing taxes for these products, Qatar is expecting significant profits, or is at least expecting to make the event profitable. The country is planning to spend 468 million Euros every week to build air-conditioned stadiums throughout the country, and the surcharge on frequently consumed products like alcohol and tobacco will surely help pay for some of these expenses.