Tax Collection Too Low in Oman
December 9, 2013 Taxation in Oman
Oman does not raise the tax revenues necessary to cover the costs of its social infrastructure and developments projects, as the collection of income taxes currently brings in OMR 350 million per year, while customs duties amount to OMR 180 million, which, together, are worth only 1.5 percent of the nation’s GDP, according to the Managing Partner of Crowe Harwoth Oman Davis Kallukaran, in a speech delivered at the opening of a professional workshop hosted in Muscat late last week.
In comparison he pointed out that the UK and the USA have tax-to-GDP ratios of 34.3 percent and 24 percent respectively, while the average for all OECD nations is estimated to be 34 percent.
Davis Kallukaran noted out that aside from the costs of the ongoing social infrastructures in the country, the government also needs an estimated OMR 15 billion to provide the funding necessary for its Vision 2020, a social development program launched in 1995, and aimed at diversifying the national economy, improving incomes, and expanding employment opportunities.
The government currently forecasts that the budget will see a deficit of OMR 1.7 billion this year, but according to Davis Kallukaran the necessary tax revenues could still be raised in the near future if the collection of income tax and customs duties is properly optimized.
Photo by: Ryan Lackey