Oman will be levying a 5% vat rate on most goods and services from 1 April 2021. The Omani government announced the new VAT regime via local state-run TV this week.
Oman is hoping the introduction of VAT will boost it’s revenue after the drops in oil prices and the effects of the Covid Pandemic. Oman is trying to climb back from a 2.8% economic decline this year and GDP fall of 16.9% according to the International Monetary fund.
Oman is the fourth gulf country to introduce its VAT regime as agreed upon within the 2016 VAT union mandate. The agreement stated that all six states would roll out a 5% VAT rate. However, only Saudi Arabia, UAE and Bahrain and now Oman have introduced their VAT regimes.
Saudi Arabia raised VAT to 15% on 1 July 2020 due to the collapse of oil prices during the COVID-19 pandemic.
Which Goods will not have a VAT Levy?
- basic foodstuffs;
- public education;
- puic transport;
- sale of real estate;
- sale of greenfield land sites
- Import of medical equipment, certain precious metals, certain transport equipment;
- crude oil imports;
Vatglobal is able to offer assistance with Omani VAT registration and compliance.