Oman rolls out 5% VAT on most goods and services
Certain goods are exempt from the tax, Omani authorities clarified.
Oman will implement a 5% value-added tax on most goods and services, as of Friday.
According to the Oman News Agency, this move is in accordance with Royal Decree No. 121/2020 as issued by Haitham Bin Tariq Al Said, Sultan of Oman.
The Omani government has also expanded the list of VAT-exempt goods from 93 to 488 basic commodities. These include vegetables, fruits, legumes, grains, dates, spices, oils, fish, red meat and poultry, milk, cheese, tea, coffee, sugar, salt, and juices without added sugars.
Oman’s tax authority had opened registration process for the companies to register in the special tax system in February last year, and plants to start levying VAT were announced in March 2020.
It is estimated that VAT will contribute 1.5 per cent towards the country’s gross domestic product (GDP) and raise around 400 million Omani riyals (Dh3.8 billion; $1 billion) per year for the country’s exchequer.
The implementation of VAT comes in line with the GCC framework that was agreed upon between the six-nation bloc. The UAE and Saudi Arabia levied five per cent VAT on January 1, 2018 followed by Bahrain. Saudi Arabia later hiked VAT to 15 per cent amidst a shortfall in revenues due to a plunge in oil prices.
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