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Oman’s finance ministry said in an economic plan for the period 2020-2024, on which new details were released on Sunday evening, that the Sultanate is expected to introduce an income tax that will be applied to high-income earners in 2022.
Last month, Sultan Haitham, who took power in January, approved a medium-term financial plan to ensure the sustainability of public finances amid pressures from the Corona virus crisis and low oil prices on the Treasury public.
Some details of the plan were revealed in a bond prospectus issued last month without mentioning a date for the income tax claim. The plan stipulates that the tax proceeds will be used to fund social programs.
“The personal income tax will be the first of its kind in the Gulf. I think it will be an important step and the GCC countries will follow it closely,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
The medium-term economic review document indicates that the initiative is still under review and that all aspects of the implementation scheduled for 2022 are under review.
According to the document, the plan aims to redirect the grant to those who are eligible, rather than distributing it without exception. The new prices for electricity and water will be calculated gradually over the next few years.
Oman has long been preparing plans to reform the economy, diversify revenue sources, and implement sensitive tax and subsidy reforms, but they have been stuck under fire from Sultan Qaboos, who ruled the country for 50 years. years old and died in January.
In mid-October, Sultan Haitham said a 5% value added tax would be implemented in April 2021, as part of the government’s revenue diversification efforts.
The six Gulf Cooperation Council countries agreed to impose a 5% value added tax in 2018, following the drop in oil prices that affected their revenues. Saudi Arabia, the United Arab Emirates and Bahrain have already implemented the tax and Riyadh has tripled it this year.
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