Public Acceptance of Taxation in Qatar

Abstract

Most Gulf countries have acknowledged that the traditional rentier system requires basic economic reform, and VAT could prove a more stable source of government revenue for oil producing countries. Results from two separate survey experiments implemented by SESRI show that, for both Qatari citizens and most expatriates, taxation is not anathema. Rather, for Qataris, not cutting current benefits is more important than adding new expenses, even though the final cost to the state may be the same. This demonstrates the importance of keeping up the appearance of state largesse even if some subsidies are ultimately transferred back to the state via taxes. More generally, the results of the experiment would seem to lend support for the predictions of global financial institutions, that if VAT rates are low and implemented correctly, the majority of GCC citizens and residents should not feel a drastic impact, thus precluding social disturbances or hindering investment and economic growth.