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Oman budget: Experts welcome move to amend Income Tax Law
January 2, 2017 | 11:00 PM
by Rejimon K./[email protected]
In Oman’s 2017 State Budget, the government has estimated it can raise OMR400 million by imposing income tax on companies and establishments.
 
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Muscat: Experts have hailed the Omani government’s decision to amend the Income Tax Law this year to raise up to OMR400 million and termed it a move in the right direction.

“Oman should amend the Income Tax Law, bring more companies under the tax net and also move ahead on implementing the increased corporate tax on companies,” Dr Anchan CK, an investment advisor in Muscat, said.

In Oman’s 2017 State Budget, the government has estimated it can raise OMR400 million by imposing income tax on companies and establishments.

Under the chapter, ‘Revitalising non-oil revenues,’ the State Budget proposes amendment in the Income Tax Law, review of tax exemptions granted to companies and establishments and induce efficiency in tax collection. It also seeks to activate monitoring and follow-up measures.



“Corporate income tax has boosted revenue over the past 10 years. In 2016, this tax amount grew from OMR180 million to OMR350.7 million. Clearly, it can increase significantly as the current figure is a pittance and not reflective of the large profits made by companies. There is still a large scope and companies need to come forward and support the government in this hour of need,” Dr Anchan added. Last year, the country had debated raising the corporate tax from 12 to 15 per cent. The International Monetary Fund (IMF) had proposed several taxes in Oman to overcome the economic crisis.

Philip K Philip, group CEO of Muscat Insurance, said the government needs to levy taxes on companies in Oman and a three per cent additional corporate tax is not going to hit companies hard.

“I don’t think it will have an impact on customers,” Philip said, adding, “Limiting tax exemptions granted to companies and establishments will be a good move. It would help government garner more money.”

Mubeen Khan, chairman of the Institute of Chartered Accountants of India in Muscat, said the expected 15 per cent tax rate would be one of the lowest corporate income tax rates in the world.

“I don’t think it will put companies in any trouble. Oman also has the world’s simplest Income Tax Law with no personal income tax,” he added.

In October, the IMF had said Oman needed to slash spending by nearly 35 per cent to balance its fiscal budget in 2016.

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