Strict new measures and penalties to combat hidden trade
Published: 04:07 PM,Jul 30,2023 | EDITED : 08:07 PM,Jul 30,2023
MUSCAT: To combat the hidden trade phenomenon, the Ministry of Commerce, Industry and Investment Promotion has issued Ministerial decision 412/2023 setting out measures to fight the practice in collaboration with a number of government agencies.
The decision comes into effect 90 days from its publication in the Official Gazette.
Hidden trade, also known as the shadow economy, adversely impacts local markets and the national economy, because it contributes to commercial fraud, distorts labour markets, disadvantages entrepreneurs and small and medium enterprises, enables tax evasion, and circumvents legally established commerce.
The decision defines hidden trade as the practice of any business activity by an individual or business lacking authorisation to do so under applicable laws and Royal Decrees in Sultanate of Oman, whether individually or in partnership with third parties.
Activities covered by the decision can be commercial, industrial, professional, craft and touristic related, or any other economic activities involving individuals without lacking the requisite approvals to do so.
The decision encourages citizens and residents to curb hidden trade activities by reporting them to the Ministry.
It noted:“ No one may carry out any commercial, industrial, professional, craft, tourism or other economic activities that are not authorised under the laws and Royal Decrees in force in the Sultanate of Oman allowing him to practice it, whether directly or indirectly, for his own account, or in association with others, whether by using the name of the dubious person, his commercial registry, or using the license issued to him, or in any other way.”
The decision stressed that everyone who comes to know of a person engaging in hidden trade must report to the Ministry with any evidence available, including electronic evidence.
The Ministry may also assign some of its specialised employees at the head office or in the directorates and departments affiliated to it, to monitor establishments indulging in hidden trade, and inspect suspect premises.
Defaulters are liable to one or more of the following penalties: Cancellation of the activity from the commercial registry; Imposition of an administrative fine of RO 5,000 or RO 10,000 for a repeat offence; suspension of the activity for three month; Administrative fine of RO 15,000 for a repeat offence for the third time; and a complete bar on the practice of that activity for one year.
The new measures come in the wake of the enactment of the Foreign Capital Investment Law, which contributes to creating an attractive investment environment in Oman. Promulgated by Royal Decree 50/2019, it allows full ownership of the company’s capital by a foreign investor.
The decision comes into effect 90 days from its publication in the Official Gazette.
Hidden trade, also known as the shadow economy, adversely impacts local markets and the national economy, because it contributes to commercial fraud, distorts labour markets, disadvantages entrepreneurs and small and medium enterprises, enables tax evasion, and circumvents legally established commerce.
The decision defines hidden trade as the practice of any business activity by an individual or business lacking authorisation to do so under applicable laws and Royal Decrees in Sultanate of Oman, whether individually or in partnership with third parties.
Activities covered by the decision can be commercial, industrial, professional, craft and touristic related, or any other economic activities involving individuals without lacking the requisite approvals to do so.
The decision encourages citizens and residents to curb hidden trade activities by reporting them to the Ministry.
It noted:“ No one may carry out any commercial, industrial, professional, craft, tourism or other economic activities that are not authorised under the laws and Royal Decrees in force in the Sultanate of Oman allowing him to practice it, whether directly or indirectly, for his own account, or in association with others, whether by using the name of the dubious person, his commercial registry, or using the license issued to him, or in any other way.”
The decision stressed that everyone who comes to know of a person engaging in hidden trade must report to the Ministry with any evidence available, including electronic evidence.
The Ministry may also assign some of its specialised employees at the head office or in the directorates and departments affiliated to it, to monitor establishments indulging in hidden trade, and inspect suspect premises.
Defaulters are liable to one or more of the following penalties: Cancellation of the activity from the commercial registry; Imposition of an administrative fine of RO 5,000 or RO 10,000 for a repeat offence; suspension of the activity for three month; Administrative fine of RO 15,000 for a repeat offence for the third time; and a complete bar on the practice of that activity for one year.
The new measures come in the wake of the enactment of the Foreign Capital Investment Law, which contributes to creating an attractive investment environment in Oman. Promulgated by Royal Decree 50/2019, it allows full ownership of the company’s capital by a foreign investor.