Falling oil revenue is making Oman’s legislature propose a value-added tax after January 2022, following similar moves by Gulf neighbours.
A joint committee of the State Council and Shura Council suggested the time frame and sent a draft law for approval to Sultan Haitham Bin Tariq Al Said. The new Sultan, when he took power in January, had vowed to take unpopular steps to bolster the $80 billion economy.
Of the Gulf Cooperation Council’s six states, Oman would become the fourth to collect VAT if it does so. The move had been agreed by the bloc years ago. The UAE imposed a 5 per cent VAT in 2018 on most goods and services, while Saudi Arabia began a 15 percent VAT earlier this year.
The joint committee has proposed excluding low-income citizens from the tax.
Shortly after his accession to the throne, His Majesty the Sultan said he would review the role of state companies in the economy. In May, he reduced salaries of new civil servants by as much as 23 per cent.
The International Monetary Fund expects Oman to have a budget shortfall of 16.9 per cent of the gross domestic product this year, since the Sultanate has been hit by the global pandemic and declines in oil prices.
