VAT implementation to boost Oman's revenues by $1bln

Muscat: Earnings from value added tax (VAT) are estimated to bring an additional OMR400 million per annum to Oman’s economy.

The country’s Majlis Al Shura will today discuss the draft of the VAT law, as part of the process required to make it into law.

A statement from the office of Ali Nasser Hamad Al Mahrooqi, the Secretary General of the Shura Council, said, “The council will devote its session to discuss, as a matter of urgency, the report of the joint committee between the State and the Shura Council regarding the articles subject to the discrepancy between the two councils on the draft of value-added tax law referred by the Council of Ministers.”

In this context, Dr Ruwaish Al Maharbi, a member of the Economic Committee of the State Council, told Al Shabiba, Times of Oman’s sister Arabic publication, “The committee has reviewed the draft VAT law and cleared the articles which need review. The community would not be negatively affected by the law as there are parallel programmes to mitigate any potential impacts.”

He added: “The VAT law is applicable in nearly all countries, with the exception of a few, which are yet to implement this. Earlier studies have shown that the revenue from implementation of the law would amount to OMR400 million.”

“The State Council agrees with the Majlis Al Shura that certain criteria must be met before implementing the law, including the presence of the correct environment to put this into practice,” said Al Maharbi.

The decision to bring VAT into Oman and five other Gulf Cooperation Council (GCC) member countries was taken by the Supreme Council of the GCC at its 36th session, which was held in December 2015. According to the decision, all six countries are to impose a 5 per cent VAT on all imports and sales of goods and services.

The General Federation of Oman Workers and Union had earlier reaffirmed that it was following up with the parties involved with the implementation of VAT, the developments of the VAT draft law and its positive impacts, such as the generation of new revenue, the availability of more liquid cash, and the creation of new job opportunities.