Oman joins the Gulf Cooperation Council (GCC) for implementing Value-Added Tax (VAT) in the country according to the media. A five percent VAT has been introduced in the country and became the fourth GCC country to implement the consumption tax. The UAE and Saudi Arabia implemented VAT in January 2018 and in Bahrain a year after that in January 2019. Oman government announced the plans to introduce the tax in October 2019, a six-month transitional period.
The country’s media had predicted that the recent implementation of VAT would raise $1.04 billion from the tax in 2021 that is equivalent to 1.5 percent of GDP. It is to note that in June 2016, the six GCC countries signed the Common VAT Agreement and pledged to introduce a VAT rate of five percent.
Dhareeba, the all-in-one platform for tax filing and returns stated that Qatar is expected to move ahead with VAT in either the second or third quarter of 2021 and is also expected to close to finalising its tax administration system.
Financial services, healthcare, education, local passenger transport, bare land, resale of residential property and rents are the goods and services exempt from VAT. Food commodities that are subject to zero VAT are vegetables, fruits, legumes, grains, dates, spices, oils, fish, red meat and poultry, along with dairy, cheese, tea, coffee, sugar, salt, and juices without added sugar or sweeteners. Other zero-rated goods and services include all exports, medicine and medical equipment, gold, silver and platinum investments, crude oil, its derivatives and natural gas and certain transport goods.
In November 2020, Oman planned to implement income tax around 2022 and is planning to lay income tax for high figured income earners.