Muscat: With the blessing of His Majesty Sultan Haitham Bin Tarik, the Ministry of Finance on Sunday announced the Fiscal Balance Plan 2020-2024 as indicated in the Council of Ministers’ statement issued on October 22, 2020.
The plan seeks to achieve sustainable levels of fiscal balance by the end of 2024 and establish suitable conditions to support Oman Vision 2040.
It includes initiatives across five pillars, some of which are already under the process of implementation, while the rest will follow suit according to priorities and readiness.
An approach of gradual implementation of procedures will be taken into account to accommodate economic and social impacts resulting from the plan once a comprehensive social security scheme is endorsed in favour of low-income segments.
This announcement comes in response to the current circumstances dictated by the slump in oil prices and the coronavirus, both of which wreaked havoc on the global economy, causing record decline in demand for energy, which, accordingly, has impacted various economic sectors.
The Fiscal Balance Plan will be published on the website of Ministry of Finance, in Arabic and English, so that it becomes accessible to all, those within the Sultanate, as well as abroad.
By implementing the financial initiatives and policies of this plan, the Sultanate seeks to avoid making deficits and relegating in its credit ratings. In the meantime, it will work to achieve safe and attractive investment ratings.
THE FIVE PILLARS
Supporting economic growth
Financial sustainability depends on the state’s ability to achieve continued economic growth, as well as adapt to financial developments and challenges. This pillar seems to enhance economic growth through the following:
1 E-transformation initiatives
2 Stimulate the real estate market
3. Government fee review initiative
4. New labour market initiatives
Revitalising and diversifying government investment returns
1. Unified approach to government investment across all sectors, to maximise returns
2. Stronger tax administration and collection
3. Implementation of Value Added Tax
4. Taxation of high-earning individuals
Rationalising and improving efficiency of government spending
1. Procurement of government-used items in a manner that reduces expenditure on them
2. Raising efficiency of money spent on development/infrastructure projects
3. Review operating expenses and control spending – salaries account for 60 per cent of current public spending
4. Reorient public service support to those sections of society that genuinely need them, instead of providing them to everyone
Establishing and strengthening the social protection plan
1. Measures across subsidies and taxation to help adapt to current financial, economic conditions
2. Identify most vulnerable families who would come under umbrella of protection
3. Social impact of each initiative to help them to be considered separately
4. Work currently underway to improve effectiveness of the system
5. Empower national population to find work in the labour market, reducing future dependence on the social protection plan
Raising the efficiency of public financial management
1. Modernisation and development of government, to improve processes of budget preparation and spending control
2. Strengthening capacities of Public Debt Management Office and Macro-Financial Policy Unit
3. Implement a unified treasury account system
4. Create national asset registry
5. Strengthen the capabilities of the administration of endowments