MUSCAT: Oman has now become the fourth Gulf state to implement Value Added Tax (VAT), with a flat 5 per cent being imposed on a range of goods and services from Friday, April 16.
The other economies to have done so in recent times are the UAE, Saudi Arabia – which last year raised its VAT rate to 15 pc from 5 pc – and Bahrain.
Oman expects 400 million riyals in additional revenues for the state exchequer via the tax, equivalent to 1.5 pc 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 pandemic hit to the economy.
Oman had in place a six-month transition period before the new tax regime came into effect. But categories such as essential foodstuff will be exempt from the VAT category and will be rated at 0 pc.
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.
READ: Grace period for illegal foreign residents extended in Kuwait
Separately to report today from the Gulf, the Kuwait government has extended the grace period for illegal expatriates by an additional month that was due to expire on Thursday.
The Kuwaiti Interior Minister Thamer Al Ali issued a decree for the extension of a grace period for illegal foreign residents till mid-May.
