A member of Oman’s Shura economic committee has said value added tax (VAT) will be introduced in the sultanate by the middle of next year, in the latest indication that GCC states will speed up discussions on the tax and reach an agreement soon.
Authorities have been in talks for some years over the possible introduction of a Gulf-wide VAT on goods and services. However, as yet, the plans are yet to be finalised.
Younis Haji Al Khouri, the UAE finance minister undersecretary, said last week that the tax is expected to be introduced in 2018, at a rate of between three and five percent.
The tax would generate between AED10 billion ($2.7 billion) and AED12 billion in revenue for the UAE alone in the first year of implementation, Al Khouri added.
But according to The Times of Oman, Tawfiq Al Lawati – who is a member of Oman’s Majlis Al Shura economic committee – has stated that VAT is to be introduced in the sultanate by as early as mid 2017.
“Implementation of VAT is in the final stages. Oman is working out a mechanism on how to collect the tax. So, by the mid-2017, we can expect VAT being introduced in Oman,” Al Lawati was quoted as saying.
He said the rate of VAT would be between three and five percent – consistent with Al Khouri’s statement – and that the tax would generate between OR200 million ($519 million) and OR300 million per year for Oman.
Nasser Saidi, a GCC-based economist, added: “While VAT is likely to be implemented at a uniform rate across the GCC, Oman should also plan to introduce selected excise taxes, for example, on recreational vehicles, such as cars, boats, tobacco, alcoholic beverages, telecom services, hotels, energy products and so on.”For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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