SUMMARY
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Oman on Monday, October 12, announced the introduction of 5% value-added tax (VAT) on goods and services, to offset a slump in oil prices and an economic downturn exacerbated by the coronavirus.
The new tax, announced in a royal decree by leader Sultan Haitham bin Tariq, begins after 180 days in April 2021, state television said.
Certain products and services will be exempt, including rent, basic foodstuffs, school fees, and public transport.
Oman recorded an average annual growth of nearly 5% between 2008 and 2016.
But growth then dropped sharply – to 0.3% in 2017, 1.8% in 2018, and 0.5% in 2019 – amid struggling oil production.
Oman, which is to cut oil production under Organization of the Petroleum Exporting Countries (OPEC) agreements, is the 4th country in the Gulf Cooperation Council (GCC), a traditional tax-free haven, to introduce VAT.
Saudi Arabia and the United Arab Emirates were the first to introduce 5% VAT in 2018, with Bahrain following in 2019.
Riyadh hiked VAT rates to 15% in May 2020, in an austerity program designed to generate extra revenue and control public spending.
Oman has recorded 106,575 cases of COVID-19, including 1,046 deaths. – Rappler.com
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