BEWARE OF VAT CHEATS

Some traders in Oman are raising prices to cash in on value added tax

Times News Service

MUSCAT:

Some rogue traders are already passing VAT charges on to customers in Oman, warn analysts.

This comes after a section of shopkeepers in Oman raised the costs of commodities imported from the UAE and Saudi Arabia, which have introduced Value Added Tax (VAT).

These traders factored in the cost of VAT into the prices of goods they bought from counterparts in both of Oman’s neighbours, despite a pan-GCC agreement that prices in nonVAT Many distributors in the neighbouring

countries have increased the product prices in the name of VAT by not only 5% but between 10% and 15% paying nations must not be changed.

This means that although VAT is only to be introduced in Oman in 2019, residents and citizens in the country are already feeling the pinch in their day-to-day spending, which in turn increases their monthly expenditure and reduces the amount they can save.

To increase income from nonoil sectors, both Saudi Arabia and the UAE imposed a five per cent VAT on a wide range of goods, many of which – especially luxury goods and electronics – are regularly shipped into Oman.

Ali Nyaz, partner, audit services at Morisons MJS, a global tax firm with operations in Oman, said it would be consumers in Oman who would ultimately pay for this increase.

“When it comes to imports, things like VAT are a little dicey because at the end of the day, the cost of this import is passed on to the consumer,” he told Times of Oman.

“If, for example, I am going to import 100 iPhones from the UAE and sell them in my shop in Oman, I will need to pay 5 per cent VAT on the cost of that phone. In fact, there are some distributors and stores in the UAE that have increased their prices by not just five per cent, but 10 to 15 per cent and are using VAT to justify the hike.