Omani traders have warned that the price of essential goods such as cooking oils, pulses and spices, could rise by up to 10 percent if the UAE forges ahead with a proposed tax on vehicles crossing the border, it was reported.
The UAE National Transport Authority (NTA) has identified 18 goods, including refrigerated trucks, livestock, foodstuff and chemicals that would attract a tax of up to AED500 ($151) per trip for trucks. In addition a tax of AED100 ($27.23) per bus and AED5 ($1.36) per seat would be applied to vehicles entering the UAE.
Omani traders fear that it would be an additional burden on the transport sector in the Sultanate, the Times of Oman reported.
“We hope the UAE will reconsider its decision and look into all aspects of the taxation proposal," said Dinesh (Dilip) Dawda, president of the Al Itefaq Trading, who imports a huge quantity of cosmetics, stationery and toiletries every month from the UAE to Oman.
Dawda said the price of cooking oils, pulses and spices could rise by five to 10 percent under the proposed tax.
"As Oman imports a substantial quantity of food items and cosmetics to meet the demand, the higher import cost will increase food inflation in the next few months,” he said.
A trader in the Ruwi High Street said “there will be no other alternative than to hike prices”.
Statistics show the Sultanate's exports to the UAE soared 24.3 percent to OMR427.5m ($1.11bn) for the first eight months of 2013, from OMR343.8m ($892.87m) for the same period of the previous year.
The plan to tax vehicles entering the UAE has already met with opposition from authorities in Saudi Arabia.
Saudi transport undersecretary Faisal Al Zabin told local media the concerns had been brought to the attention of NTA chairman Nazim bin Taher.
The proposed tax is one of several measures introduced by the UAE through NTA, which is the statutory authority for new land transport policies. The proposed road tax was to have been levied from September 2013, but according to the reports, it would be implemented soon.