Excise tax on beverages, tobacco to buoy Oman revenues in 2017

FROM P13

Hydrocarbon revenues realized in 2016 are projected at RO 5 billion in 2016, a decline of 18 per cent from the 2016 budget estimates. This is primarily because the realized price of oil during 2016 was around $39 per barrel as against the budgeted price of $45 per barrel, he said. Overall revenues are, however, RO 100 million more than 2016 budget primarily on account of the increase in non-oil and gas revenues, he noted.

Actual expenditure in 2016, while, 6 per cent higher than the budgeted expenditure of RO 11.9 billion, actually declined compared to 2015 actuals by 8 per cent, Hariharan said. Expenditure is hoped to fall to RO 11.7 billion in 2017, representing a decline of a further 8 per cent compared to the actual of 2016.

The budget deficit for 2017 is projected at RO 3 billion, compared to RO 5.3 billion expected to have been incurred in 2016, the tax executive said. This is a significant drop compared to 2016 and reflects the expected higher price of oil and gas compared to 2016 and a further containment of the expenditure by around 8 per cent. The deficit as in 2016 is expected to be predominantly financed out of external borrowings (84 per cent). Borrowings as a percentage of GDP is expected to go up to 29 per cent, he stated.

“This is again a new reality for Oman and many other governments in the region, and is sending a clear message that the government would need to accelerate steps to diversify its non-oil and gas revenues in order to manage its budgetary deficits well,” Hariharan added in conclusion.