AlwaysFree: Oman To Impose 5% VAT On Most goods, Services In 2021

Oman plans to introduce a 5% value-added tax (VAT) on most goods and services in April 2021 in a bid to boost the state’s public finances after being struck by the COVID-19 pandemic and low oil prices. Essential food items,  education, financial services, and medical care will be exempted from the tax.

The sultanate also carries out various measures to boost its finances, including by streamlining the government, rationalizing spending, and offering new bonds and sukuk. The country follows the move of regional peers, the UAE, Saudi Arabia, and Bahrain in applying VAT. Kuwait and Qatar are reportedly set to implement similar policies before the end of 2022.

Oman’s oil and gas exports contribute to 60% of the country’s total exports and 70% of its revenues. The economy suffered from a severe impact from the collapsing oil demand and prices due to the coronavirus pandemic. Under the OPEC+ supply reduction deal, Oman’s oil production is capped at 682,000 bpd in May-July and 722,000 bpd in August-December. 

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