MUSCAT, MARCH 16 – The draft legislation for implementation of Value-added Tax (VAT) in the Sultanate is under process and an announcement in this regard is expected soon. According to a senior official at the ministry of finance, although the date has not yet been finalised, the actual date of enactment is currently under review. “The run up to implementation requires a great deal of preparation. Still the plan is to implement VAT in the country as early as possible”, said Sulaiman bin Salim al Adi, Director-General of Survey and Tax Agreements at the Secretariat General of Taxation of the ministry.
The target earlier was to introduce VAT in September this year, but the date is under review and not finalised, he said. Talking to Oman Arabic, sister publication of the Observer in an interview, Al Adi said, “a timeline is required for preparing necessary legislations for the introduction of VAT. This is under process”. He said that implementation process has to go through different stages and levels. Discussions are still continuing with the departments concerned. “The regulations need to be studied properly to avoid any kind of a complication”, he added.
The implementation process involves the release of a proposed law apart from measures to deal with the registration requirements and processes. The Sultanate will exempt some 94 basic commodities from VAT and 5 per cent tax will be levied on the rest of goods and services. Five per cent VAT is expected to be imposed on retail purchases, car sales, car rentals, hotels, restaurants, repair and maintenance. The member states also have the discretion to exempt or zero rate, as they deem fit on essentials like food, education and medical supplies. VAT is being introduced in the Sultanate under the GCC agreement.