Oman government is looking to implement a standard 5% VAT regime starting from September 1st, 2019. After the 6 GCC countries (Saudi Arabia, Oman, Qatar, UAE, Bahrain and Kuwait) signed the VAT framework agreement in 2017, Saudi Arabia and UAE have been the only countries amongst the lot to implement the 5% VAT rate starting this year.
This consumption tax will help the GCC states diversify their revenues from oil duties, which have fallen sharply since the oil price collapse. The government also indicated that a nil VAT rate will be applied to many essential foods, public transport and real estate.
What does this mean for you?
Businesses that meets the requirement for VAT registration should begin preparing for VAT compliance at the soonest, as they have some time before getting compliance ready. This will help them smoothen the implementation phase.