MUSCAT: Oman’s State Council members on Wednesday voted favourably to postpone the implementation of the widely-discussed Individual Income Tax Law.
In a meeting held under the auspices of Sheikh Abdulmalik Abdullah Al Khalili, Chairman of the State Council, the members also unanimously voted in favour of reducing the personal income tax rate from 15% to 5% in the draft Individual Tax Law.The Economic and Financial Committee said that an “in-depth study’ needs to be done before implementing the law.
At the meeting, the committee indicated that the law seeks to diversify sources of income, diminish dependence on oil and redistribute wealth among segments of society. The law also seeks to enhance the government’s ability to finance the Social Protection System and combat the evasion of income tax on companies and enterprises, the committee added.
As per the draft law, individuals who are earning monthly salaries of above RO 2,500 (over RO 30,000 income annually) will be subjected to income tax once it is implemented.
“The question is whether the time was right to apply income tax to individuals. I prefer not to go into the positive aspects of the tax because it is always misunderstood and the most important thing is whether the timing is right,” asked Honourable Dr. Dhafer bin Awad Al Shanfari, Chairman of the Economic and Financial Committee of the State Council
In June, the Shura Council, proposed for an amendment of 29 articles from the draft law before it was forwarded to the State Council.
Meanwhile, the International Monetary Fund said diversifying revenue sources and implementing tax reforms through taxes remain key priorities for the oil-exporting Gulf countries.
“For the GCC, continuing to diversify revenue sources and implement tax reforms (through the introduction and expansion of value-added, personal income, and corporate income taxes) remain key priorities,” IMF said in the World Economic Outlook.
“For some economies, expanding the tax base to increase the revenue stream could provide the funds needed to meet social and developmental needs,” IMF added.
