Signing of OECD BEPS convention to bring in more transparency

MUSCAT, DEC 11 - Oman’s recent signing of the Base Erosion and Profit shifting (BEPS) multilateral convention introduced by the Organization of Economic Development and Cooperation (OECD), has been described as a significant milestone. As a signatory, Oman has committed to exchanging financial information of its residents in order to monitor money laundering and terrorism funding activities or shifting tax residences to escape tax through various permutations and combinations.

“To a great extent, the signing of this convention will bring about strict measures to prevent undesirable transfer pricing and money laundering activities,” said Davis Kallukaran, Managing Partner of Crowe, a public accounting, consulting and technology firm. Speaking at a tax workshop held at the Sheraton Oman Hotel on Wednesday, Kallukaran also pointed out that an uptick in customs duties and corporate tax collections have contributed to a decrease in Oman’s budget deficit this year.

The deficit declined 20 per cent to around RO 1.5 billion for the first nine months of this year compared to corresponding figures for 2018.

“Of the total revenue, 10 per cent — almost RO 800 million was contributed by customs duty and corporate taxes. Corporate tax collection has gone up by around 25 per cent in the first 9 months to touch RO 580 million, while another RO 162 million from custom duty,” he said, crediting the increase to better tax administration measures.