Muscat: All firms who stockpiled goods which fall under the new Sin Tax regulations will have just 15 days to declare the stock and pay the tax in full, according to a government notification.
On Saturday, a 100 per cent excise tax will be introduced on tobacco products, energy drinks, alcohol and pork, while a 50 per cent tax will be applied on carbonated drinks. The new tax is expected to bring in up to OMR100 million a year to help balance Oman’s books.
Some suppliers have not made deliveries to outlets in recent days, prompting fears that stock bought at lower prices would be sold after June 15, with the 100 per cent increase in place.
But the government has closed that loophole. “Any companies that have a stock of excise goods at the date of the law going into effect must declare the value of its stock and pay the tax for it within 15 days of the tax coming into effect,” the notification issued on Tuesday ordered.
This includes retailers, hotels and restaurants or any other commercial merchant with stocks of alcohol, carbonated and energy drinks, and pork products.
Companies that try to dodge the tax could face fines as high as OMR20,000, as well as a three-year jail sentence.
Sulaiman bin Salim Al Aadi, Director General of survey and tax agreements at the Secretariat General for Taxation, said: “Imposing the excise tax could generate between OMR90 million to OMR110 million annually. It also depends on the local market demand. It can go up and down depending on consumption.”
“The added tax will be on consumable goods only, and products brought from a duty-free area are not included as they are outside the country’s territory.”
This tax is meant to help public health, and Al Aadi said that the funds generated could go towards health and social services, adding: “The tax was imposed due to health and environmental impacts. It can help to fill the state coffers as well as to reduce the damage because of consumption of these items.”
Al Adi added that there are strict controls for suppliers to make sure they are complying with the new tax.
“After imposing such a tax, there will be a decline in the consumption of these items but later things will return to normal.
“The excise tax is a consumption tax and is considered to be indirect tax. Thus, the final charge is on the consumer, but it is collected in advance at a stage of the supply chain, notably through the business sector.
“Suppliers who refuses to declare these items to the Secretariat General of Taxation will be jailed for between one to three years and slapped with a fine of not less than OMR5000 and not more than OMR20,000,” he added.
People traveling into Oman with their own products for personal use are exempt from the tax, so long as the value of the products does not exceed OMR300 in value.
In a presentation for business owners at the Oman Chamber of Commerce and Industry, heads of the chamber informed business owners: “Products brought into the Sultanate along with travelers are exempt within the limits of personal use, which are shown in the unified customs code, so long as they are not brought for commercial use.”
Article 19 of the unified customs code implemented by the Royal Oman Police states: “Fines and customs fees are forfeit for personal luggage and gifts that do not exceed S.R3000 in value or its equivalent in terms of other GCC currencies.
“To make use of the exemption: Luggage and gifts must be personal and in non-commercial amounts, the traveler must not be a frequent visitor to the customs department or a professional in work related to the products in his possession. The number of cigarettes exempt from the fees must not exceed 400 cigarettes.”
Government and diplomatic officials will not have to pay the tax, however.
The notification also said: “Products which are imported by diplomatic agencies, consulates and international organisations, as well as the heads and members of official diplomatic services, so long as the same applies for Omani organisations. These bodies may also apply for a tax return on products bought from the local market if they have already been taxed.