With a flat 5% being imposed on a range of goods and services Oman now has become the 4th Gulf state to implement Value Added Tax (VAT).
The other economies of gulf states to have done VAT in recent times are the UAE, Saudi Arabia and Bahrain which last year raised its VAT rate to 15% from 5%.
As per to details, The Oman expects 400 million riyals in additional revenues for the state exchequer via the tax, equivalent to 1.5% of the country’s GDP, The receipts will come in handy as the Gulf state tackles budget deficits that have widened as a result of the COVID-19 pandemic hit to the economy.
Oman had in place a 6-month transition period before the new tax regime came into effect, But categories such as basic foodstuff will be exempt from the Value Added Tax (VAT) category and will be rated at 0%.
It must be noted that United Arab Emirates (UAE) has had a VAT regime since January 1, 2018, In the recent past, top Ministry officials have said that there are no plans to raise the VAT rates.