As Sultanate of Oman’s state general budget achieved a financial surplus of RO 784 million at the end of the first half of this year, the contribution of taxes (excise and VAT) to the national economy is significant.
According to the fiscal performance bulletin of the Ministry of Finance, the excise tax and VAT revenues amounted to RO 48 million and RO 345 million respectively as of end of first quarter.
As per the State Budget 2022 estimates, the current revenue was expected to be around RO 3,160 million, of which income from excise and VAT was expected to be RO 535 million.
Corporate tax was expected to bring in revenues to the tune of RO 465 million in 2022.
VAT was introduced in Oman in 2021 at the rate of 5 per cent in the GCC framework. The tax is levied on the supply of goods and services in the country.
Speaking to the Observer, a market analyst said: “Five per cent VAT might be the lowest slab, but it is important to note that the rollout was quick, and we have already started seeing the results over the past year.”
It may be noted that the country has introduced excise tax with effect on tobacco (including tobacco derivatives), alcoholic beverages, energy drinks, sugar-sweetened beverages, and carbonated drinks.
In the financial statement, the government said that development expenditure will be increased to RO 1,100 million compared to budgetary figures, up by RO 200 million, which will be allocated for priority projects and economic and social impact schemes.
The government aims to allocate RO 650 million for implementing additional development projects under the Tenth Five-Year Development Plan (2021-2025), especially in sectors such as health, education, housing, transport, tourism, and municipal services.
It may be noted that the Ministry of Finance recently qualified 10 local and international developers in the first stage for a competitive tender for development of 42 schools via the Public Private Partnership (PPP) route.
The government has also proposed to set up a haemodialysis services project, a drugs rehabilitation centre and fishing ports in Musannah and Liwa.
@vinot_nair
Oman Observer is now on the WhatsApp channel. Click here
