Qatar is set to implement "sin taxes" targeting junk food, tobacco, soft drinks, luxury items and any substance "harmful" to the environment.
A draft law issuing the new taxes, which will cover "goods harmful to human health and the environment," has been approved by Qatar's cabinet, according to the Qatar News Agency.
These taxes were announced last June, but officials initially only said they would target tobacco, fast food and soft drinks. It remains unclear how the tax on luxury items and items harmful to the environment will work, but they may be implemented as soon as April.
All Gulf countries are applying new taxes
Last year, GCC countries – Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, Qatar and Oman – announced they would implement a 5 percent value added tax starting 2018. The decision came as Gulf countries felt the effects of significantly lower oil prices.
Low oil prices have forced GCC governments to reexamine subsidies to their citizens, make massive budget cuts and run major budget deficits.
In December, Saudi Arabia also announced "sin taxes" on tobacco products, sugary soft drinks and energy drinks. A 50 percent tax will be levied on soft drinks and a 100 percent tax will be placed on cigarettes and energy drinks as of the second quarter of 2017.
The kingdom aims to fight obesity and diabetes among its population –especially children – through such taxes. Qatar is facing a similar problem with its population and likely has similar motivations, according to Doha News.
Environmental pollution can also have grave effects on human health, which may add incentive to tax items that harm the environment.
The environment tax also comes as GCC countries aim for a greener future
As oil prices have plummeted and the Gulf nations have made strides to diversify their economies, renewable energy initiatives have also been promoted.
Saudi Arabia plans to become a "solar powerhouse" and invest tens of billions in renewable energy sources. The kingdom's Energy, Industry and Mineral Resources Minister Khalid Al-Falih said that Riyadh will invest between $30 to $50 billion in renewable energy by 2032
The UAE may exceed its target of producing 24 percent of its energy from renewable sources by 2021, UAE State Minister Dr. Rashid Bin Fahad said in January. The country may also be ready to start producing nuclear power by May, making it the first Arab country harnessing nuclear energy.
Qatar has taken a similar path and has been a strong regional advocate of green energy over the past few years.