With the commencement of a new year, Oman announced its 2021 Budget. As per citings from the Oman News agency, VAT is set to roll out in April 2021 promising an increment of 300 million rials ($779 million) to the Revenues expected for the year.
As per the Finance Minister Sultan bin Salem Al Habsi, a 5% VAT is anticipated to be implemented. This addition to the government treasury is a key one as it helps offset a forecasted 19% drop in revenue cognizing financial losses from lower crude oil prices and the COVID 19 pandemic.
As per Hettish Karmani, head of research at Ubhar Capital the government is prudently taking measures to shun their reliance on Oil and increase contributions from other sources like Excise and VAT.
This budget is estimated to put back 3.5 Billion rials including the VAT revenues. This is still going to prove insufficient as the complacent budget would reflect a 2.24 billion Rials deficit. These predictions are chartered out in the Official budget passed by the royal decree issued by Oman’s Sultan Haitham Bin Tarik on Friday,
As per Oman Daily Observer and Times of Oman, the year 2022 is reckoned to forbear Omans plan to charter Income Tax on high earners as part of the 2020-2024 Medium Term Fiscal Plan of the Finance ministry.
The International Monetary Funds (IMF) laid down its projections depicting a 10% shrinkage in Oman's Economy considered to be the highest among its gulf counterparts.
Mr. Karmani as quoted to The National News said that the measures taken in the budget were aimed at boosting investors' confidence in Oman and for depicting a strong plan for repayments by the government.
Source: https://mof.gov.om/Portals/1/documents/Tawazon/MTFP%20-%20English.pdf
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