In a meeting on 1st September 2020, the Shura Council agreed to the recommendations of the Joint Committee of the State and Shura Councils on the draft Oman VAT law, and returned the draft law to the State Council. On 3rd September 2020, the State Council approved the draft VAT law and submitted it to His Majesty, the Sultan, along with the recommendations of the State and Shura Councils.
Although there have been news reports of the Shura and State Councils recommending that VAT implementation in Oman be delayed until 2022, the Head of the State Council’s Economic Committee has clarified that the final decision on the timing of implementation will be made by His Majesty, the Sultan.
The recent downgrade in Oman’s credit ratings, the increase in budget deficit, and the expected reduction in corporate tax/non-oil revenue collections continue to add pressure on the government to cut spending and consider new sources of revenue. Oman is expected to collect circa USD 1 billion from VAT, making the introduction of VAT an obvious contender to address some of the budgetary pressures. The possibility of implementation in early 2021, therefore, remains.
We are hosting a webinar on 8th September 2020 where our VAT implementation specialists will discuss the status and timelines of Oman VAT implementation, the potential impact it is likely to have on businesses, and the process of implementation based on their experience in the region and globally.
We invite you to register for this highly topical webinar, if you have not already done so.