27 February 2017
Syed Haitham Hasan
Muscat: Dodging taxes can lead to a jail term of up to three years and a maximum fine of OMR50,000 under tax law amendments published by the Ministry of Finance, as government begins its crack down on evaders.
Out of the 300,000 companies registered by the Oman Chamber of Commerce and Industry, only about 10 per cent file tax returns with the government, according to details published in the Official Gazette. The move is designed to ensure voluntary compliance and self-assessment.
The amendments target tax evaders who do not submit their account book details to the government or conceal these, or destroy documents requested by tax authorities or show documents with incorrect tax liability now face a minimum jail term of six months and a fine of OMR5,000.
Previously, there was no minimum imprisonment period and the maximum fine was only OMR5,000.
“The maximum penalty for abstaining from submitting information and documents requested by the tax authority or not attending hearings which may be called has been increased from OMR2,500 to OMR5,000,” the report stated.
A fine of OMR3,000 will be slapped for non-compliance with tax law regulations and a penalty of up to OMR2,000 will be imposed on firms that fail to file tax returns within due dates.
The changed law also stipulates that a tax payer will have to obtain a tax card, which will be valid for a specified period and would need to be renewed thereafter.
An application for a tax card has to be submitted when the tax payer initiates the procedure for registering his commercial activity with the relevant authorities.
All documents relating to a tax payer’s transactions with a government entity should be accompanied by a copy of the tax card.
Failure to comply with the tax card-related provisions will result in the imposition of a fine up to OMR5,000.
Changes introduced to the new income tax law in Oman by Royal Decree No. 9/2017
Any foreign person not carrying on any activity in Oman through a permanent establishment, will be taxed for dividends on shares of joint stock firms, interest and fees from provision of services
Previous tax free threshold of OMR30,000removed, tax rate raised from 12 per cent to 15 per cent
Exemptions provided to industries scrapped. These included exemptions that were earlier available to mining, export of locally manufactured goods, operation of hotels and tourist villages, agriculture, animal produce, fishing, education and medical care
Every tax payer will have to obtain a Tax Card and mention the Tax Card number on all contracts/invoices/correspondence
Provisions related to imposition of penalties and punishments, strengthened. Now there is even a provision for jail of the Principal Officer for failure to comply with the requirements of the law.