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Oman will impose five per cent value-added tax (VAT) from early next year, said an Omani minister on Tuesday.
"VAT is something people don't like it but this is something we have been lobbying for. It will come into effect sometime in the beginning of the next year," said Ali bin Masoud Al Sunaidy, Minister of Commerce and Industry in Oman.
Currently, three GCC countries, UAE, Saudi Arabia and Bahrain, have levied VAT as agreed by the six member countries. Oman will most likely be the next GCC country to join the league.
A study by EY had predicted that the adoption of VAT by GCC countries would generate additional annual revenues of $25 billion.
The minister said Muscat is targeting 2.5 per cent to three per cent economic growth this year, unless some geopolitical tension emerges in the neighbourhood.
"We also look at diversifying the economy. reforms are inevitable because when oil prices crashed, our GDP crashed tremendously from 30 billion Omani riyals to 26 billion riyals, but now it is back to 30 billion riyals; we have to get back to reforms and enable the young and private sector to carry the future," said while speaking to Bloomberg TV.
The minister hopes that the oil price will cross $70 a barrel which will be helpful for regional economies.
"The economy is being revived at 465 but $70 would be more comfortable for most of us in the region, not just Oman. However, at $65 and even $60 to $65 barrel, we will look more seriously at tourism, manufacturing, fisheries and logistics sectors," he added.
"$26-27 a barrel was not helpful at all and now $65 is very much helpful. We were hoping oil will cross $70, but now we're becoming accustomed to below $60 and we will be running our budget like that," he said during the interview.
