Oman will implement a value added tax (VAT) in six months, i.e, within 180 days from the date of publication of the Royal Decree issued in this regard.
With the VAT implementation, Oman will join 160 other countries - on a global level - that impose VAT, Oman News Agency reported.
The tax will be imposed on most goods and services, with the exemption of a specific set of goods and services, rendered to consumers at outlets throughout the Sultanate. It will also be imposed on imports of goods to the sultanate, except the ones exempted by law.
The list of goods and services exempted from the soon-to-be-imposed VAT includes healthcare, education, financial services, and basic food items and supplies for persons with special needs, among other items and services.
The 5% VAT is considered one of the lowest payments of its kind, compared to international rates.
The rates of implementation of VAT in the 160 countries that currently levy the tax, ranges from 5% to 27%.
The tax is expected to provide an additional source of support to the Oman's general finance. It is also expected to ensure the quality of public services and facilitate the sultanate's diminishing dependence on oil and other hydrocarbon sectors as main sources of revenues.
In addition, VAT implementation within the sultanate expects to have a positive impact on economic and social development, and will fuel the international competitiveness of the sultanate. Other positive effects will be the improvement of public services within the sultanate and the sustained development of future infrastructure and the generation of more stable tax income that will help predict economic conditions.
Oman's business sector will serve as collector of tax in the sultanate and it will bear the cost of imposing the VAT, collecting it, claiming it and adhering to it as per the law and bylaw.
Taxpayer establishments will add the VAT on taxable goods and services, while the end consumer of goods and services will bear the VAT cost.
In May 2020, Saudi Arabia implemented an increase in the value-added tax rate (VAT) from 5% to 15% as part of its slew of measures that aim to offset the challenges associated with the COVID-19 outbreak in the kingdom.