Posted on Jan 3rd, 2021 via Muscat Daily – The introduction of a value added tax of 5 percent (VAT) in Oman from April 2021 is expected to generate additional income of RO 300 million for the sultanate this year, according to the budget declaration published by the Ministry of Finance.
VAT is an indirect consumption tax so it is the end users who ultimately bear the VAT costs. The tax will be levied on goods and services in Oman from April 2021, with the exception of the education and health sectors and some staple foods.
” The financial impact of the measures and initiatives taken under the medium term financial plan (2020-2024) was estimated at RO 3.5 billion in 2021. Revenues increased by RO 565 million due to VAT, which is expected to generate RO 300 million for government investments, income of up to RO 195 million, excise tax of RO 20 million and taxes of RO 50 million, ”the company said Ministry of Finance statement.
Consumption tax and VAT revenues are expected to total RO 413 million in 2021, tripling from the estimated RO 100 million in 2020, according to the ministry’s statement.
Corporate tax revenue is estimated at RO 400 million in 2021, a 27 percent decrease from the 2020 budget. That decline is mainly due to the aftermath of the COVID-19 pandemic, the statement said.
In accordance with the Royal Decree (121/2020), the taxpayer was given a grace period of six months to register and prepare their internal system for VAT implementation.
The Treasury Department said the 5 percent VAT rate applicable in Oman is among the lowest in the world. Hence, the impact of VAT on the cost of living in Oman is expected to be minimal.
‘VAT will have a positive impact on Oman’s economic and social development and international competitiveness. The funds raised from this tax will help build a sustainable economy for future generations and also help to improve public services and further develop infrastructure in the future, ”added the ministry’s statement.
© Apex Press and Publishing. Provided by SyndiGate Media Inc. (Syndigate.info)
DISCLAIMER: This content is provided to us “as is” and is not edited by an external third party provider. We cannot confirm or guarantee the accuracy of the third-party information contained in this article. We do not endorse any views or opinions contained in this article.