The government of Oman on 1 January 2020 revealed its 2020 budget.
The 2020 budget demonstrates the government’s continued focus on controlling the deficit. The deficit, as a percentage of GDP, is expected to decline from 9% in 2019 to 8% in 2020. The government is seeking to achieve this in an era of declining oil revenues by enhancing revenues from gas, taxes, and other non-oil revenues.
The private sector is expected to play a greater role in development projects and job creation. New laws that aim at stimulating foreign investment are expected to assist in achieving targeted rates of foreign and domestic investment.
With respect to indirect tax, the successful implementation of an excise tax on alcohol, carbonated drinks, energy drinks, pork and pork products, and tobacco and tobacco products in June 2019 is expected to continue generating revenues for the government. Oman is expected to expand the scope of excise tax to sweetened drinks during 2020.
The 2020 budget does not reflect any revenues from the introduction of a value added tax (VAT) in Oman. The tax authority and the Ministry of Finance in Oman, however, remain committed to the introduction of VAT and preparations continue to get the VAT legislation approved and published during 2020 with a formal announcement regarding the effective date of implementation to be made during 2020.
Read a January 2020 report [PDF 264 KB] prepared by the KPMG member firm in Oman
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