Oman goes live with 5% VAT

DUBAI. Oman has become the fourth Gulf state to implement VAT, with a flat 5 per cent being imposed on a range of goods and services from yesterday.

The other economies to have done so are the UAE, Saudi Arabia — which last year raised its VAT rate to 15 per cent from 5 per cent — and Bahrain.

Oman expects 400 million riyals in additional revenues for the state exchequer via the tax, equivalent to 1.5 per cent of the country’s GDP. Oman had in place a six-month transition period before the VAT came into effect. But essential foodstuff will be rated at 0 per cent VAT. UAE has had a VAT regime since January 1, 2018. In the recent past, top Ministry officials have said that there are no plans to raise the VAT rates.