MUSCAT, SEPT 18 - Revenues from taxes and fees grew by 10.7 per cent and contributed more than half of other current revenues during 2018 in the Sultanate. “The strong growth in income tax on companies and establishments was the main driver of growth in taxes and fees revenues, reflecting robust activities in the private sector,” says a report by the Central Bank of Oman. The ‘fees on licences and others’ and ‘customs duties’ witnessed a growth of 1.9 per cent and 5.8 per cent, respectively, during the year.
Even though merchandise imports moderated, the customs duties grew due to the reversal of exemptions on some imports and introduction of Bayan clearing system that efficiently facilitated the administration and collection of customs duties, the report points out. At the same time, the total government revenues recorded a considerable growth of 28.6 per cent during 2018 mainly due to an upsurge in oil and gas revenues.
On the other hand, the apex bank report points out that non-tax revenues declined by 6 per cent during 2018, despite a noticeable growth in income from government investments, resulting in a drop of their contribution to other current revenues by 4 percentage points to 43 per cent.
Income from government investments constituted the highest share of 44.2 per cent in non-tax revenues, followed by compensation, fines and forfeitures (10.7 per cent), and miscellaneous administrative fees and charges (7.8 per cent).
“Income from government investments, reversing the declining trend of 2016 and 2017, witnessed a considerable growth amidst the improving overall macroeconomic environment that resulted in improved assets valuation in the Sultanate,” the report reveals.
The hardening interest rates and increase in government deposits conditioned a sizable upturn in interest on bank deposits and lending.
Furthermore, the receipts from passport and immigration fees registered robust growth, reflecting an upward revision in passport and visa fees.
Nonetheless, revenues from several items, including water revenues, airport revenues, public communication services toll, and miscellaneous revenues and others, declined. According to the report, the government efforts aimed at diversifying the sources of government revenues are yet to attain the desired results, as other current receipts realised a compounded annual growth rate of 2.4 per cent for the last 5 years.
“A major boost to private sector-led growth would be critical to enable other current receipts buoyant, contributing significantly to government revenues,” says the report, adding “the introduction of exercise tax during the second half of 2019 and likely implementation of VAT would also boost other current receipts”.
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