The cost of living in the GCC will never be the same with the Value-Added-Tax (VAT), which Oman will implement from 2019. The government also plans to implement the selective tax from the middle of this year on items like the tobacco, sugary items and alcohol among others. The deregulation of fuel prices, brought into effect since 2016, had only the gradual impact, aided or negated by the low level of oil prices for most of these last two years.
Things are changing now as crude oil prices are now seeing a steady recovery and fuel prices, including that of diesel, are at its all-time high. Rising diesel prices will stoke inflation because transport costs will rise.
This will be a dicey situation for people as the GCC has been known as a tax-free, low-inflation economy in the past.
“The new generation of Oman will envy surely their seniors because the job market will be more competitive, challenging and so also the cost of living. There are still some social security benefits offered by the government and that will also evolve over the period,” said Moshin, a government sector employee.
He said all jobs, including the government sector, will be competitive because the last two years of low oil prices have taught everyone to value for the each amount spent.
“I hope the education system should also prepare children for the competitive future. They should be taught that there is a price to pay for anything”
The government will offer more facilities in line with the demands of the today’s economy. “High-speed Wi-Fi, mobile internet, efficient public transport system and quality hospitals, multi-lane expressways and efficient airports and hospitals will come up as per the need of the time, but they all will come at a price that the average resident population will have to share with the government,” said Shaima, who did her economics studies in Europe.
The governments cannot do away with their social obligations, but the people must be equal partners in that, she said.
Oman still has one of the reasonable cost of living index in the world and the expatriates here should take that into account always. “There will be a new mind set applied in the coming years, but it will take time for the people to accept that service always comes with a cost.”
The inflation rate in the Sultanate increased by 1.7 per cent in December 2017, compared with the same period in 2016, according to the National Centre for Statistics and Information (NCSI).