Proposal to hike visa renewal fee in Oman can raise OMR125 million
April 19, 2016 | 9:26 PM
by Rejimon K / [email protected]
At minimum, the government can earn OMR125 million extra, even if the current visa renewal fee is increased from OMR200 to 300, said Tawfiq Al Lawati, a Majlis Al Shura member who submitted the proposal. Picture used for illustrative purposes only. Photo-File

Read also: Higher visa fees to hit hiring of expatriate workers in Oman, say experts

Muscat: A proposal to revise visa renewal fees for expatriate workers in Oman, previously tabled at the Majlis Al Shura, will generate at least OMR125 million, according to the Shura member who submitted the proposal.

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“At minimum, the government can earn OMR125 million extra, even if the current visa renewal fee is increased from OMR200 to 300,” Tawfiq Al Lawati, a Majlis Al Shura member who submitted the proposal, told Times of Oman.

According to the proposal, those who earn less than OMR300 would pay OMR300 as visa renewal fees and those who earn more than OMR300 would pay 3 per cent of their monthly salary for two years at the time of renewing their visa.

“At present, the government collects OMR250 million in visa renewal fees. Now, even by increasing the minimum from OMR 200 to 300 it will bring in OMR125 million. And by calculating 3 per cent for those who earn more, it will bring in extra money,” Tawfiq added.

According to March data from the National Centre for Statistics and Information (NCSI), the size of the expat population in Oman has reached 2,004,820.

Out of this, the total number of expatriate workers in the Sultanate was 1,747,000 at the end of March. As of July 2015, the size of the expatriate workforce in the Sultanate was only 1,631,560.

According to the proposal, if an expatriate’s monthly gross salary is OMR1,000, then his two year salary will be OMR24,000, and three per cent will come to OMR720. According to the new proposal, the worker would pay OMR720.

“The move can bring in fair practices and also generate more revenue for the government,” the Shura member said, while adding that the revision proposed is not new and was in practice before 1996 in Oman.

Meanwhile, Tonia Gray, general manager at Competence HR, said that it is understandable that the government seeks other areas of revenue during the current economic difficulties, however, care needs to be taken that the different measures taken by the government do not adversely affect those companies that support the country in the coming years.

“The country is promoting diversification of industries outside the oil and gas sector, and this is likely to require senior expatriates to be brought in during the early years as new enterprises are being set up. Whilst the individual increases are not prohibitive, adding them together may ultimately cause financial difficulties for many SMEs and new businesses,” Tonia added.

N Gurumurthy, a finance expert, said the move may have wider ramifications for sponsors and expats.

“The move would not only adversely impact the financials, but also act as a deterrent for expat employment. For instance, a company that wishes to renew visas of, say, 20 employees earning around OMR2000, may have to shell out OMR28,800 upfront, which might be a prohibitive sum for many companies,” Gurumurthy said.

“Besides, organisations will think twice before offering higher or increased wages in order to reduce their visa fees. In other words, the visa fee, and not the performance, will determine whether salary hikes would be given. There may be other problems, as well. What will happen to visa fees paid in case employees leaves in three months? Will proportionate fees be refunded?,” Gurumurthy asked.

At present, the majority of companies pay the visa renewal fees for their expatriate workers without collecting them from workers.

Besides visa fees, Oman has adopted other austerity measures to shore up revenues to cushion the budget deficit caused bythe dip in oil prices.

A special panel has also been set up in the Shura to look into measures to overcome the economic crisis.

Oman’s new budget projects OMR3.3 billion in deficit spending for 2016 which, it says, it will seek to reduce by improving non-oil revenues, as well as cutting expenditures. Oman posted a budget deficit of OMR4.5 billion in 2015, as revenues declined by more than 50 per cent.

Official statistics show that Oman lost $14 billion in revenues in 2015, compared to a year earlier, due to low oil prices.

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