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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Unlicenced workers hit economy, say experts

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MUSCAT, May 6 - Individuals and companies doing business in the country without valid approvals from various ministries and licence from Oman Chamber of Commerce and Industry (OCCI) are affecting the national economy in a big way and impacting the national planning and policy formation.  Officials and economic experts have called to curb this menace of fictitious companies operating in the country, and legalise their entities, failing which legal action should be taken against them.


“Working without a licence implies any namesake company, with or without expertise, carrying out jobs of similar companies which are registered with the OCCI,” said Dr Muhannad al Asfour, Head of the ‘Work without Licence Committee’ and member of the Labour Market Regulatory Committee at the OCCI. “These companies are affecting the GDP of the country in multiple ways,” he adds, “First, they are breaking the rules and laws of the country, secondly, they create unfair competition by taking away jobs of legally registered companies, and thirdly they are evading taxes thus causing huge loss to the coffer.”


Speaking to the Observer on the sidelines of a workshop organised by the OCCI on “Work Without a Licence” attended by experts and businessmen and stakeholders interested in organising labour market in Oman, Dr Al Asfour pointed out that one of the most important problems being faced by economic planners and decision-makers is the difficulty of quantifying the phenomenon of practising without a licence and its impact on national economies.


They observed that lack of accurate information leads to inability of planners to develop effective economic plans which correspond to ground realities. This leads to hidden trade and migration of funds outside the Sultanate, which impede growth and development in society.


“If the shadow economy is some 20 to 30 per cent of the GDP, then the government is losing an equivalent amount by way of taxes and other revenues by such (operating without a licence) practises,” says Dr Abdul Salam Yahya, economic expert at the OCCI.


“Although the phenomenon of growing the volume of work without a licence is one of the main problems which can exist in any economy, it may turn into a real economic problem because it leads to the growing size of shadow economy or informal economy,” Dr Yahya added.


“The focus is slowly shifting from nabbing illegally operating service providers to booking clients who are the ultimate beneficiaries of lower prices which boost their profitability,” adds Dr Muhanned al Asfour.


The workshop urged authorities to initiate steps, including educating all parties to stop assigning work to those who do not have a licence, and limiting the dealings with legally authorised parties. It also urged to work on organising a broad awareness seminar to discuss the points raised in this regard.


Accordingly, a national campaign to raise awareness about negative effects of the phenomenon of work without licence will be organised.


“The committee is working to identify the challenges facing the labour market regulation, and its direct and indirect effects on national economy. We are also working on ways to identify this phenomenon and work to eliminate it or reduce its presence to ensure improved labour market performance”, said Mohammed bin Hassan al Ansi, Chairman of the Labour Market Regulatory Commission at the OCCI.


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