Tax slash for Qatar imports

The Qatari government has passed a three-year law exempting imports of gravel, steel and cement from customs duties.

The exemption will apply to imports of gravel, steel and cement and will only apply to materials brought in from countries outside the GCC. (Angela Gi
The exemption will apply to imports of gravel, steel and cement and will only apply to materials brought in from countries outside the GCC. (Angela Gi

The Qatari government has passed a three-year law exempting imports of gravel, steel and cement from customs duties.

The law came into effect earlier this week and will only apply to materials imported from outside the GCC.

Although the move will ease the current struggle contractors in the country face with price rises, a tax exemption on all products used in the construction industry is needed, according to Graham Wright, country manager, Gardiner & Theobald Middle East.

"Contractors here haven't had the best of experiences over the last couple of years with rising prices, especially for cement, rebar and steel, and they've all been on fixed-price lump sum contracts," he said.

"Taking the duty off is one step - but it doesn't make it any easier for the contractor. It should cover all products that are imported, such as aluminium, timber and panelling."

Wright added that one of the things holding contractors back from estimating future price increases in their bids is the lack of proper construction cost indices.

"You can't say: ‘let's have a contract where there'll be reimbursed inflation' - because there are no mechanics to calculate that."

Eight types of cement will be exempt from customs duty including white cement, clinker and cement used in waterfront projects.

Gravel used in road construction and reinforced concrete will also be exempt along with five types of steel, including rebar.

"It's a good move by the government but it will be interesting to see how the client reflects this in the existing contracts," said Argun Yum, a project manager with contractor, Baytur.

"I don't necessarily think that clients will reject or disagree with it, but they might come back to us and ask: since the customs duty is off, what's the rebate for us?"

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