International Finance

Oman plans to increase government revenue to OMR12 bn by 2024

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The plan is a part of Oman’s National Plan for Fiscal Balance 2020-2024

Oman is planning to increase its government’s revenue to OMR12 billion by the end of 2024, media reports said. The plan is a part of Oman the National Plan for Fiscal Balance 2020-2024 which ensures continued economic development in the future. Currently, Oman’s government revenue is around OMR8.6 billion.

During this period, public expenditure is expected to slightly contract from its current level of OMR12.66 billion, to OMR12.632 billion. According to the Ministry of Finance, it will indirectly help the debt-to-GDP ratio reach 80 percent by 2024, compared to 128 percent.

In this regard, Dr Mohammed Al Wardi, an economic analyst in Oman previously told the media, “This is a critical time for Oman’s public and private sector, because of the coronavirus, and the decline in oil prices, which has affected spending capabilities. This tax is imposed on every stage of the manufacturing and procurement process for a company, but it is not cumulative, so the consumer will only pay the final five percent of the tax rate.”

The Omani government has also revealed in its mid-term fiscal plan 2020-2024 report that it will impose a tax on individuals earning higher incomes from 2022. Many economists believe VAT will help the Omani government strengthen its revenue stream which will lead to economic development for the sultanate.

Garbis Iradian, Chief Economist, MENA of the IIF recently told the media, “The Omani government spending as a share of GDP is 43 percent – much higher than most developing and emerging economies. Oman still has ample scope to scale back spending and raise the efficiency of public investment.”

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