Underground Market in Qatar

Subject: Health Care
Type: Informative Essay
Pages: 5
Word count: 1054
Topics: Alcoholism, Government, Health, Public Health

The preservation of the health of populations through minimizing and preventing the adverse utilization of alcohol is a public health priority. Not only does alcohol consumption produce dependence properties but also has both social and health consequences. It contributes to a variety of diseases including liver cirrhosis, cardiovascular diseases, cancers, tuberculosis, and pneumonia. Additionally, it results in property damage, default on social role, neglect, and abuse, as well as injury to other individuals. Alcohol consumption also leads to substantial direct economic costs including health care services expenses and justice sector costs, alongside indirect social costs, such as lost working duration because of premature death, decreased earnings potential, reduced output, and rampant absenteeism (Story, 2012).  

Because of these evidently adverse outcomes of alcohol consumption, Qatar has implemented strict laws to restrict the sale of alcohol. Qatar Law affirms that driving under the influence of alcohol or drunken behavior in public is a crime punished by a fine, imprisonment, or both. Qatar Distribution Company (QDC) is the only authorized distributor of alcohol, and not everyone can get access with the prerequisite for an alcohol permit. To obtain the license, an individual must be earning over 4,000 riyals and submit the application with a letter from the employee. Additionally, a one-time refundable deposit of 1,000 riyals and an annual charge of QR150 is required to maintain the permit (Qatar Day, 2016).

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Nevertheless, although these restrictions were effective in limiting alcohol production, there has been a rising trend from 2005 as indicated in figure 1. Permit holders buy more alcohol than they can drink since there is no limitation on the quantity purchase and most of the liquor ends up being shared with other individuals who do not meet the requirements. This pattern can be supplemented by the fact that QDC experienced growing revenue from QR1.6 billion in 2014 to QR1.9 billion in 2015. Additionally, although 93% of the population of Qatar are non-drinkers, according to WHO (2014), a report of alcohol consumption and its health effects, there is high alcohol consumption among the drinkers.  Their average consumption is 22.7 liters of alcohol annually, which is almost 1.5 times the global mean of 17 liters per drinker. Furthermore, the most shocking are the astronomical unrecorded alcohol consumption that relies on alcohol that is industrial improvised, manufactured illegally, produced at home, or smuggled into the nation. The unrecorded alcohol consumption accounts for more than a third of the total alcohol consumed with an average of 0.6 liters per individual annually. 

With strict alcohol policies, there has been increased prevalence of lower income people who mainly entail immigrant workers to consume toxic alternatives. The black market has been prospering in the Industrial Area, and the consumption of illicit liquor holds exponential health problems such as short- term memory loss and impaired vision and can also lead to death (Amnesty International, 2013). With the black market providing almost 40% of the alcohol consumed in Qatar, it provides an excellent source of government revenue. Various shop dens have been emerging around the Industrial Area and provide cheap illicit liquor to willing customers. A tax rate of 10% shall be imposed on locally manufactured alcohol and 5% for any imported beverage. A higher tax rate shall be imposed on locally produced alcohol and a lower rate for imported brands to deter individuals from taking advantage of the relaxation of alcohol policies and begin large scale production in the nation.

With an approximately 1.5 million migrants receiving an estimated QR4,811 monthly salary and the high unrecorded alcohol consumption, the taxation revenue would amount to QR5 million annually. The funds generated shall be used to carry out repairs and maintenance of public amenities and structures including restoring monuments, improving museums or libraries, and maintaining cleanliness in the roads and streets.  The new tax will be sufficient since the relationship between alcohol consumption and prices is inelastic, whereby the decrease in consumption is less than proportional to the rise in price. Therefore, there is enough room for the government to increase the tax rate continuously. In the long term, the price elasticity of demand will be higher resulting in the consumption rate plummeting further. 

The tax shall be administered by the ministry of commerce and enforced by QDC, which shall be providing the imported alcohol to the shop outlets in the Industrial Area. To ensure compliance and effective alcohol tax administration, controlling the alcohol supply chain is vital. The warehouse system shall be useful whereby the QDC shall manage the storage facilities of all alcohol imported and locally manufactured to guarantee that the tax debt is collected.  All shop operators in the Industrial Area shall be licensed with a one-time non-refundable QR5, 000 and an annual charge of QR500 to allow their trade in alcohol. 

In minimizing the complexity of tax collection, the government shall impose the taxes at the point of release from storage for consumption, importation, or production. The tax remunerations shall be required by regulation to be submitted at a fixed date monthly and should be accompanied by a report describing volumes of raw materials, price by brands, sales or production volumes, and the taxes due and paid. There will be an exemption from sales tax on alcohol during popular global holidays including Christmas and New Year. The reason for this decision is the government’s acknowledgment of an increasingly multicultural population, and thus, it is imperative to be fair. 

The new tax policy will have a positive effect on the economy, not only will it create job opportunities in the alcohol supply chain, but it will allow the government to raise revenues to meet increasing public needs. In addition, the tax will gradually reduce the alcohol consumption, saving government expenditures and economic costs on related health costs and lost productivity respectively.   

Did you like this sample?
  1. Story, S. (2012). Alcoholism and its negative effects. Delhi: Orange Apple.
  2. Amnesty International. (2013). The dark side of migration: Spotlight on Qatar’s construction sector ahead of the World Cup.
  3. World Health Organization, (2014). Global status report on alcohol and health 2014.
  4. Qatar Day. (2016). Liquor and guidelines for drinking in Qatar | Legal | Blog | Qatar Day. Qatar Day
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