New SME classification will improve coordination

Business Sunday 17/January/2016 18:53 PM
By: Times News Service
New SME classification will improve coordination

Muscat: A new classification introduced for micro, small and medium enterprises will help enhance coordination between various bodies dealing with these businesses, says a senior official.
Revising the definition of these units was deemed necessary and the new categorisation was introduced based on the input received from various parties, said Redha Juma Mohammed Ali Al Saleh, vice-chairman at the Oman Chamber of Commerce and Industry (OCCI).
Recently, a decision was issued by Ali bin Masoud Al Sunaidy, minister of commerce and industry and chairman of riyada board of directors, amending the classification of SMEs based on the number of workers and annual sales, according to Oman News Agency (ONA).
It states that a micro enterprise has 1-5 workers and annual sales of less than OMR100,000; a small enterprise has 6-25 workers and annual sales of OMR100,000-500,000; and a medium enterprise has 26-99 workers and annual sales of OMR500,000-less than 3,000,000.
Positive move
Speaking to ‘Times of Oman’, Al Saleh, the OCCI vice-chairman for administration and finance affairs, described the introduction of the new classification as a ‘positive’ development. Previously, every authority was defining SMEs differently so this new move will help enhance coordination between various bodies dealing with these units, the official noted.
The OCCI will definitely follow the new terminology, he added. Al Saleh also believes that the new categorisation will help facilitate the implementation of any decision related to taxation of SMEs.
The new definitions will help identify which businesses are SME and which are not, the official explained.
International definition
Commenting on the argument that the previous classification was not in line with international definitions, Al Saleh said that he thinks the new terminology is closer to the international classification as it has been introduced after receiving input from various bodies.
“I think the new figures are more realistic,” said the OCCI vice-chairman.
According to ONA, the decision to revise the classification of SMEs is based on the Royal Decree No 36/2013 on the establishment of the Public Authority for Development of SMEs (riyada) and riyada board of directors and on the decision ofriyada board of directors at its third meeting held on October 6, 2015.
The decision comes after taking into account the views and proposals of all parties concerned, including government agencies and private sector companies, commercial banks and entrepreneurs through a seminar organised by riyada in March 2015, as well as the recommendations of the consultant in charge of the preparation of riyada strategy.
The decision introduces the new classification of micro, small and medium enterprises to pave the way for further support of these institutions.
The previous classification was as follows: Micro enterprise with 1-4 workers and up to OMR25,000 annual sales; small enterprise with 5-9 workers and OMR25,000-250,000 annual sales, and medium enterprise with 10-99 workers and OMR250,000-1,500,000 annual sales.