Oman adopts conservative approach in estimating non-oil income

Business Sunday 10/January/2016 19:30 PM
By: Times News Service
Oman adopts conservative approach in estimating non-oil income

Muscat: Oman government has adopted a conservative approach in estimating non-oil revenue in the recently announced State Budget for 2016.
Although government fees on several services have been raised this year, the total non-oil current revenue estimate is at OMR2.4 billion for 2016 against OMR2.38 billion estimated for the previous year, mainly on account of an expected slowdown in overall business activity of corporate sector.
For instance, the state budget proposed an increase in corporate income tax, fee on expatriate’s employment visa, electricity and water charges of commercial establishments, vehicle registration and driving fees. However, the estimated income from these heads is showing only a marginal growth since the government adopted a very conservative approach in calculating revenue.
Corporate income tax estimate for this year is at OMR520 million, marginally up from last year’s estimate of OMR500 million. It appears that the authorities have considered only the growth in tax rates.
Likewise, fee on non-Omani labour licence is estimated at OMOR253.80 million (against OMR245 million), transport licence at OMR64.93 million (against OMR60 million) revenue from sale of water at OMR90.12 million (against OMR77 million), according to State Budget 2016 document. The total revenue estimate of taxes and government fees is at OMR1,329.82 million in 2016 against OMR1,334 million for the previous year, indicating a marginal fall.
There is also an expectation of lower income from several other taxes and service fees, mainly on account of an expectation of a slowdown in several business activities. For instance, revenue from customs duty is estimated lower at OMR313 million (against OMR330 million), airports is estimated lower at OMR37.85 million (against OMR43 million), income from government investment at OMR500.37 million (against OMR523 million) and passport and immigration fees at OMR32.69 million (against OMR38 million).The overall slackness in Gulf markets might have affected the investment revenue of the government.
The non-oil current revenue estimate is around 28 per cent of total revenue OMR8.6 billion this year.