22 June 2016
PAY TIMELY TAX: Failure of payment will lead to strict action, the Finance Ministry's notification says -

Muscat  Taxpayers in the Sultanate have been warned against delay in submitting their annual returns of income for the financial year ended December 31, 2015.

In a notification, the secretary-general of taxation in the ministry of finance, said: "All taxpayers are required to adhere to the date to avoid penalties and punishments promulgated in Oman's income tax law."

The secretary-general urged that taxpaying companies should file their annual returns of income in the prescribed forms on or before June 30, 2016, and "pay the tax due, if any, on the basis of such returns".

Failure of payment will lead to strict action, the notification added.

In Oman, corporate tax law is governed by the Law of Income Tax on Companies promulgated by Royal Decrees. The tax year coincides with the regular calendar year beginning on January 1 and ending on December 31.

However, if necessary, special permission may be acquired from the Ministry of Finance to obtain a different fiscal period.

The taxes are to be paid in accordance with Royal Decree No 28/2009, which stipulates that "all income generated by an Omani company is taxable, irrespective of where the income was generated".

Ever since the oil price malaise started gripping the country, the Oman government has been making all-out efforts to collect maximum tax as possible to fill its coffers.

Oman is expected to post an RO3.3-billion budget deficit this year due to lower oil revenues.

The country has already unveiled subsidy cuts, reduced benefits for public sector workers and increased fees to make up for the shortfall, following an RO4.5-billion deficit last year.

The State's Council gave its approval for an Income Tax Law, Insurance Companies Law and Foreign Capital Investment Law in the beginning of this year.

A consensus has already been reached to levy a 15 per cent tax on all the corporates' annual income without any exception or discrimination.

Previously, Oman's corporate tax stood at 12 per cent but only applied to businesses earning over RO 30,000. The increase is expected to help the government raise an additional RO125 million to RO250 million a year.

According to the proposal, companies that are not SMEs and having a capital investment of above RO 50,000 will have to pay 15 per cent tax.

The proposal is yet to be decreed by His Majesty Sultan Qaboos.

In the beginning of this month, Majlis Ash'shura and the State Council also voted to impose taxes on petrochemical firms and increase tax on liquefied natural gas companies.

© Oman Daily Observer 2016