Airport duty-free items to be exempt from excise tax

MUSCAT, JUNE 12 – Excisable goods offered for sale at duty-free shops at airports in the Sultanate will not be subject to Excise Tax when the new levy comes into force on Saturday, June 15, 2019, according to Oman’s tax authorities.

The clarification came at a workshop organised by the Oman Chamber of Commerce and Industry (OCCI) in collaboration with the Secretariat General of Taxation on Tuesday.

It was attended by representatives of leading importers, producers and distributors of excisable goods in the Sultanate. Asked by one of the participants about the applicability of excise tax to excisable merchandise sold at duty free shops, an official explained that duty free zones typically fall outside of the remit of domestic tax regimes.

Consequently, the new excise levy will not be applicable to excisable goods sold to departing passengers at duty free areas at international airports in the Sultanate, the official said.

Four select categories of food, beverage and tobacco products will attract an additional levy in the form of Excise Tax with effect from June 15. They comprise: tobacco and tobacco derivatives (100 per cent), carbonated drinks (50 per cent), energy drinks (100 per cent), and special purpose goods (alcohol and pork products) at 100 per cent.

It is understood that the excise tax waiver will apply primarily to duty-free shops in the Departures terminal of Muscat and Salalah International Airports. This is consistent with the practice followed at international airports in countries of the Gulf Cooperation Council (GCC) where Selective Tax has been implemented as part of a broader GCC-wide plan to bolster domestic revenues.

According to experts, maintaining the tax-free status of merchandise sold at duty-free stores at Muscat International Airport is key to the broader goal of attracting tourists to the Sultanate, as well as positioning Muscat as a hub for international travel.

Competitively priced, international-class merchandise offered at duty free stores typically enhances the appeal of an airport as a gateway for international travel, they point out.