MUSCAT, SEPT 24 – Estonian technology firm Nortal says it has been contracted by the Omani government to develop an administration solution to support the proposed implementation of Value Added Tax (VAT) in the Sultanate at a cost of around RO 4.4 million.
A high-level executive of the Tallinn-headquartered international company said the project is in line with a broader initiative by the Gulf Cooperation Council (GCC) states to introduce VAT as a revenue-enhancing measure effective from January 1, 2018.
Andres Raieste, Head of Public Finance Management at Nortal, said his company has been selected as a “partner to provide the necessary solutions and establish the infrastructure for the implementation of effective tax collection” in the Sultanate.
He explained in a statement that Nortal is assisting the Sultanate’s tax authorities in the modernisation of systems and processes designed to enable the smooth rollout of VAT and for its seamless and hassle-free adoption by the corporate and business sector in Oman.
“We are re-designing processes and creating everything including the technology and supporting the Omani Secretariat General for Taxation in terms of legislation, policy-making and the change management needed to implement the new tax,” said Raieste.
The contract award signals Oman’s determination to introduce VAT — part of a raft of reforms and measures adopted by the Sultanate’s government to shore up government revenues in the face of a significant decline in hydrocarbon export earnings — sometime in early 2018.
Saudi Arabia and the United Arab Emirates (UAE) have also announced firm plans to bring VAT, which will be applied at the rate of 5 per cent for most goods and services, into effect from January 1, 2018. However, a firm date for the introduction of VAT in the Sultanate is still awaited, although experts believe it will come into force sometime during 2018.
According to Raieste, Nortal’s administration solution will seek to ensure “maximum accrual of VAT and effective collection of the tax with minimum administrative burden and costs, while creating a fair business environment and citizen-friendly services for all taxpayers”. The resulting VAT administration solution will also be flexible enough to deal with potential future changes in fiscal policy, he said.
Nortal, which has operations in over 20 countries around the world, has delivered a number of e-government and digitalization projects for various Omani government ministries and public sector agencies.
Notable are the Invest Easy online portal of the Ministry of Commerce and Industry, a tax management solution for the Tax Department, and an employment planning system for the Ministry of Manpower.