Oman Eyes Tax Hikes
November 25, 2014 Taxation in Oman
MUSCAT – Oman may soon slash government spending and raise tax rates in order to bolster government coffers in the face of dropping oil prices.
On November 24th the Oman News Agency issued a report claiming that the government-appointed Shoura Council has brought forward a proposal to enacting several tax hikes in order to raise more funds to counteract the negative fiscal effects of dropping prices for oil around the world.
It is currently estimated that if the price of the Brent oil exported by Oman does not rise above the forecast price of USD 80 per barrel over the course of next year, the government will face a budget deficit of OMR 3.05 billion.
The Council suggested that the government implement a tax of 2 percent on international remittance services used by expats in the country, a move which could raise as much as OMR 62 million.
Under the Council’s suggestions, telecommunications operators would also be subject to a 12 percent royalty on profits, and new taxes would be imposed on the export of liquid natural gas, while the rate of royalties paid for mineral exploitation would rise to 10 percent.
Alongside the tax hikes, the Council also called for a 5 percent decrease to government spending on defense, development and oil production.