Oman is all set to roll out the 5% Value Added Tax (VAT) across the country. Oman is the third in the Arab world to introduce the 5% VAT following the UAE and Saudi Arabia, which both implemented the taxation scheme back in 2018.
The new regulation is expected to generate 1.5% of Oman’s gross domestic product (GDP) and generate approximately 400 million Omani riyals annually.
Oman Next to Enforce 5% VAT After UAE, Saudi Arabia
According to Saud bin Nasser Al Shukaili, Oman’s Director of Taxation, all the preparations and requirements needed to implement VAT are in place. This includes the promulgation of tax-related regulations and the operation of tax computer systems and electronic devices, as well as electronic linking with relevant authorities, Gulf News reported.
The Heath of Tax Authority also approved the Executive Regulations for the Value Added Tax (VAT) Law.
It noted that the five per cent applies to most goods and services, but certain sets of goods and services offered are exempt. In addition to products that are exempt by law, tariffs are also levied on goods imported from the Sultanate.
The list of VAT-exempt products and services includes medical, educational, financial services, basic food and supplies for people with special needs, and other products and services.
“All the necessary preparations and requirements for the implementation of the value-added tax decided on April 16 have been completed in terms of issuing legislation related to tax, operating the tax computer system, and electronic linking with the authorities concerned with the application and strengthening the human cadre in the agency,” Al Shukaili said.
Al Shukaili, emphasized that the VAT is necessary for the current global economic climate, and will approximately generate 1.5 per cent of the value in GDP. “OMR 400 million is expected to be collected annually from the application of this tax,” he added.