VAT in OMAN from tomorrow, what items exempted?


Muscat: The value-added tax will come into effect tomorrow, which will be imposed on most goods and services in addition to the goods imported into the Sultanate, with some exceptions specified in the law, and according to the law, the tax will not include the sectors of health care, education, financial services, basic foodstuffs and special needs for people with disabilities.

The Sultanate’s government had previously announced 93 basic food commodities exempt from value-added tax, but the list of these commodities has been expanded to 488 food commodities as part of the social protection initiatives blessed by His Majesty Sultan Haitham bin Tarik.

In November 2016, the Sultanate signed the unified agreement for value-added tax for the countries of the Cooperation Council for the Arab States of the Gulf, which are the foundations on which the local law of each country is based, while allowing each country to choose different tax treatments in some of the cases specified in the agreement.

In 2017, the Ministry of Finance announced a postponement of the value-added tax until 2019, after it was to be applied in 2018 according to the unified agreement.

In July 2019, the Ministry of Finance confirmed that it is proceeding with the implementation of the value-added tax, denying that news that it is postponed.

In the same year, the Sultanate joined the countries of the Gulf Cooperation Council GCC in imposing a 100% excise tax on five products, namely tobacco, pork, alcohol and energy drinks, in addition to a 50% tax on soft drinks, and the Sultanate did not apply value-added tax in that year.

At the end of 2019, that the general budget for the fiscal year 2020 did not include value-added tax, and thus it was confirmed that it would not be applied in that year.

In October 2020, the Value-Added Tax Law was promulgated by Royal Decree No. (121/2020) that set the date for applying this tax 180 days after the date of the decree’s publication in the Official Gazette.

In March of this year 2021, His Excellency Saud bin Nasser bin Rashid Al Shukaily, Chairman of the Tax Authority, issued Decision No. Tax, objection and grievance procedures, and the list consists of 13 chapters, with a total of 211 articles.

The tax is a resource for the state’s public finances

It is hoped that the value-added tax will provide an additional resource for the state’s public finances that will ensure the continued quality of public services. It will also support the achievement of the Sultanate’s objectives to reduce dependence on oil and other hydrocarbon products as main sources of its revenue.

The impact of the tax on living

According to its publications, the Tax Authority expects that the impact of the value-added tax on the cost of living will be limited, especially since the percentage that will be applied in the Sultanate is considered low when compared with those applied in other countries around the world, which means that the impact of this tax on the prices of goods and services will be subtle. .

Method of calculating the tax

The value-added price is calculated if the price of a product you want to buy is 10 riyals without tax, then the value-added tax that will be charged is equal to 500 baisa (10 times 5% = 0.500 riyals, meaning that the price of the final product will become 10.500 riyals with the tax.

Tax Authority published the table




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