DOHA – Qatar’s prime minister insisted yesterday that the Gulf state had been right to buy London department store Harrods and that the gas-driven economy is doing so well that there is no plan to introduce income tax.
Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani also said in his first interview since becoming head of government on March 17 that Qatar wanted its US$450 billion (RM1.98 trillion) sovereign wealth fund to become one of the world’s five biggest.
The sheikh was questioned about the Qatar Investment Authority’s (QIA) foreign purchases in the rare televised encounter between a leader of the Gulf state and an audience from the public.
Qatar bought a 17% stake in German auto group Volkswagen in 2009 and paid a reported US$1.7 billion for Harrods in 2010.
Volkswagen is recovering from a scandal while the landmark London store was badly hit by the coronavirus pandemic, reporting losses for 2020 and cutting hundreds of jobs.
QIA is also the owner of Paris Saint-Germain football club, which has failed to win a European title despite spending hundreds of millions of dollars to sign stars like Lionel Messi and Kylian Mbappe.
Al-Thani, a key member of the QIA leadership, defended the purchases.
“Harrods was bought from the profits of our investment in Volkswagen for only one year and its value is now five times higher,” he said.
“QIA invests internally and externally, and its mission is to fill a gap in the economy.”
Foreign purchases are based on “purely commercial” decisions and are in competition with other sovereign funds, he added.
Qatar’s investment in natural gas since the 1990s has seen it become one of the world’s wealthiest countries.
Despite global economic troubles, Qatar last year had a budget surplus of nearly US$25 billion as natural gas prices surged.
“We have achieved a 38-fold economic leap in 30 years,” Al Thani said.
He vowed that the energy sector would become increasingly locally owned and that the Gulf state, run by the Al-Thani family for more than 150 years, would keep diversifying the economy to assure the state’s future.
“We have made great strides in (diversification), Qatar aspires to be one of the five largest sovereign funds in the world,” the prime minister said.
Most of the world’s biggest sovereign wealth funds now have more than one trillion dollars in assets.
Al-Thani said that “income tax is not part of the government’s plans” and that there is no immediate plan for a value-added tax.
He said that if a VAT was introduced, it would be on a “limited segment” of goods and would not “deduct anything from the citizens’ income”. – AFP, April 14, 2023
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