Oman Introduces 5% VAT, Predicts OMR 400 Million in Tax Income in 2021

Effective the 16th of April 2021, Oman has introduced a 5% Value-Added Tax (VAT), making it the fourth Gulf Cooperation Council member country to implement this consumption tax. The UAE, Saudi Arabia and Bahrain preceded Oman.

Why it Matters?

Oman seeks to narrow its widening fiscal deficit using VAT income, as it expects to raise OMR 400 million (USD 1.04 billion) in 2021, which is equal to 1.5% of the country’s gross domestic product. A period of six months was given for Omanis to prepare for the implementation of VAT. It is possible that an income tax will follow in the coming years.

Details

Goods and services that are exempt from VAT include financial services, health care, education, local passenger tran...