Stiff penalties await excise tax defaulters in Oman, experts warn

MUSCAT, JUNE 11 – Importers and distributors of commodities subject to excise tax are liable to hefty penalties if they fail to register with Oman’s tax authorities of submit incorrect details in their tax returns, experts have warned. The Excise Tax Law, promulgated by Royal Decree 23/2019, prescribes fines ranging from RO 1000 to RO 10,000 or prison terms of between two to 12 months, or both, for a string of violations, according to an explainer on the new levy compiled by Crowe Horwath Oman, a leading audit and accounting firm.
Instances of non-compliance that an attract these penalties include failure to submit excise tax returns, release of excise goods from a tax warehouse without payment of excise tax, failure to examine excise goods at the time of receipt and prior to placing or storing them in a tax warehouse, and failure to nominate a responsible person.
“The Law also provides for more stringent penalties of between RO 5,000 to RO 20,000 or imprisonment for a period between one year to three years or both, in case of: Failure to notify the Secretariat General of details of inventory in case of levy of excise tax or increase of the excise tax rate on excise goods; Failure to register with the Secretariat General; Failure to report correct details in the excise tax returns; Submission of forged excise tax returns, documents or records to evade payment of excise tax; and Destruction, concealment or disposal of any documents, records, accounts, statements or other information requested by the Secretariat General within one year from the receipt of the notice from the Secretariat General,” said Crowe Horwath Oman in its explanatory note.
Businesses engaged in the following activities in Oman must register for excise tax: companies producing excise good, importers of excise good, businesses in possession of goods on which excise tax has not been paid, and those license to establish a tax warehouse.
According to the audit firm, excise tax returns and payment are due within 30 days of the end of the tax period. “The tax period is a period of three calendar months. The first tax period starts from the date of registration and each subsequent tax period starts from the next day after the end of three calendar months,” it explained.
Applicable tax payers are advised to take stock of goods in their possession on June 14, 2019, and complete their registration for excise tax between June 15 and June 30, 2019. First excise tax return must be filed between June 15 – 30, 2019. Commercial entities such as hotels, restaurants and retail shops are required to file one-time transitional excise return.