Oman Advisory Body Approves Corporate Tax Rise as Oil Rout Bitesby and
Shura Council votes to raise corporate tax to 15 percent
Oman faces budget deficit of 17 percent of economic output
Oman’s Shura Council voted to hike corporate taxes as the Middle East’s largest oil producer outside of OPEC faces another year of shrinking government revenue.
The elected advisory body voted on Tuesday to raise corporate taxes on companies registered in Oman by 3 percentage points to 15 percent and to end corporate tax exemptions, council member Tawfiq Al Lawati said by phone. The council also voted to raise taxes on net income to 35 percent for petrochemical companies and 55 percent for natural gas companies, the official Oman Daily reported. The recommendations need approval from the State Council and cabinet before becoming law.
The oil-rich Sultanate faces a budget deficit of more than 17 percent of economic output this year as the oil price slump cuts into the government’s main source of revenue, pushing officials to study project delays and new taxes. While Oman isn’t the only Gulf country stretched by the oil rout, it has thinner fiscal buffers to fall back on than neighboring Saudi Arabia and the United Arab Emirates.
Raising corporate taxes would “revive the state budget,” Saleh bin Saeed Masan, president of the council’s economic and financial committee, was cited as saying by Oman Daily.
Measures approved by the Shura Council aren’t always backed by higher officials. Last year, the council voted to ban alcohol but the recommendation was never implemented.