SALALAH, MARCH 29
As Eid approaches, shoppers in the Wilayat of Salalah are increasingly being asked to transfer payments to personal bank accounts rather than using approved electronic systems—an alarming trend that may point to widespread violations of Oman’s commercial regulations.
In one incident observed by the Oman Observer, a customer at a clothing store was informed that card payments were not accepted. “Just transfer the money to my bank account,” the shop assistant instructed.
Such transactions are becoming more frequent across Salalah’s retail sector, according to field visits conducted by the Observer. Many of these outlets appear to be operated by expatriate workers, although they are officially registered under the names of Omani citizens. The lack of electronic payment systems and official invoices has raised serious concerns about potential breaches of Oman’s anti-commercial concealment (hidden trade) laws.
UNFAIR COMPETITION
Ahmed Salim, a small business owner in the Wilayat of Salalah, said that unlicensed operations are undermining legitimate enterprises. “We issue receipts, comply with tax laws, and use electronic payments. Others sidestep all of that and sell at lower prices. It’s not a level playing field,” he said.
He added that the situation is discouraging young Omanis from entering the retail sector. “This kind of environment kills motivation,” he noted.
In response to these concerns, the Ministry of Commerce, Industry and Investment Promotion has intensified enforcement. In a recent inspection campaign, the ministry reviewed 1,528 commercial outlets within shopping centres in the governorates of Muscat and Al Batinah South. The campaign led to more than 40 violations against shops that failed to comply with Ministerial Decision No (386/2022), which mandates that retailers must offer electronic payment options to customers.
Ahead of Eid, the Ministry also issued a public advisory urging consumers to report any retailer that refuses e-payments or requests money transfers via personal phone-linked accounts. Complaints can be submitted through the Tajawob platform at www.tajawob.om.
Regulatory framework
In July 2023, the ministry introduced new regulations aimed at combating commercial concealment—defined as enabling unlicensed individuals to operate a business, either independently or in partnership. Under these regulations, offenders face fines ranging from RO 5,000 to RO 15,000, with the potential for permanent licence revocation in cases of repeated violations.
Authorities have been granted broad powers to conduct unannounced inspections. Red flags include income transfers to personal accounts, false registration data, unauthorised managerial roles held by foreign workers, and the use of non-commercial bank accounts.
Both citizens and residents are required to report suspected violations, while self-reporting may result in reduced penalties.
Economists caution that concealed commercial practices reduce public tax revenues and hinder the government’s efforts to regulate the market and create employment opportunities for Omanis. “These shadow transactions create an informal economy that competes with the formal sector and undermines national economic policy,” one analyst observed.
POLICY RECOMMENDATIONS
To effectively curb commercial concealment and promote fair competition, experts and business owners advocate for a comprehensive approach. This includes mandating digital payment systems across all retail outlets to ensure transactional transparency and reduce informal cash-based dealings. Authorities should also impose immediate penalties on shops that fail to issue official receipts, as the absence of documentation often signals regulatory evasion.
Public awareness campaigns are essential to educate consumers on their rights and encourage them to report violations. Furthermore, establishing more direct communication channels between consumers, municipal authorities, and regulators will enable faster identification and resolution of non-compliant practices. Collectively, these measures can foster accountability, strengthen regulatory oversight and restore confidence in the retail sector.
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