Oman to levy 5% VAT from next month

Muscat - It is estimated that VAT will raise around 400 million Omani riyals per year.

Oman will start implementing five per cent value-added tax (VAT) from April 16, Oman News Agency reported on Sunday

It is estimated that VAT will contribute 1.5 per cent towards the country’s gross domestic product (GDP) and raise around 400 million Omani riyals (Dh3.8 billion; $1 billion) per year for the country’s exchequer.

The implementation of VAT comes in line with the GCC framework that was agreed between the six nation bloc. The UAE and Saudi Arabia levied five per cent VAT on January 1, 2018 followed by Bahrain. Saudi Arabia later hiked VAT to 15 per cent amidst shortfall in revenues due to plunge in oil prices.

A study by EY had predicted that the adoption of VAT by GCC countries would generate additional annual revenues of $25 billion.