The Sultanate of Oman, vide Royal Decree 1/2022, issued the State’s General Budget for the Fiscal Year 2022. The 2022 budget is prepared in accordance with the objectives of the Tenth-Five Year Development Plan (2021-2025). This represents the first plan of Oman Vision 2040, which aims to achieve financial sustainability while stimulating economic sector diversification. The 2022 budget reflects all government measures, endorsed by His Majesty Sultan Haitham bin Tarik, that aim to increase non-oil revenues and reduce public spending on government units.
Key highlights of Budget 2022
- The budget is based on an oil price of USD 50/bbl as compared to USD 45/bbl in the tenth five year plan. The average price of oil for 2021 was USD 61/bbl.
- The 2022 budget estimates Excise Tax and VAT revenues will increase by 29.5% in 2022 to RO 535 million. Meanwhile, corporate income tax revenues are estimated to increase by 16% to RO 465 million.
- The cost of purchasing gas has risen significantly in Budget 2022 due to the fact that after the establishment of Energy Development Oman (EDO), the methodology of purchasing gas from PDO Block 6 changed.
- The deficit is estimated to be RO 1.55 billion, which is expected to represent 15% of revenues and 5% of the GDP in 2022.
- The government seeks to achieve its economic and social development objectives as detailed in the Tenth Five year Plan (2021-2025) and Oman Vision 2040 through a number of measures and initiatives expected to be adopted in 2022.
Please read our comprehensive analysis attached below, and register for our webinar on Tuesday, 11 January 2022 at 11:30 am, during which we will share highlights of the Budget and insight on various initiatives and their potential impact.