Muscat: Oman is considering major reforms in order to cut spending and increase revenues amid an oil price slump that has resulted in a significant rise in the country’s deficit, according to local media.

The measures being studied by the cabinet include the levying of taxes on expatriate remittances, increasing taxes on real estate rent contracts, as well as rises in electricity tariffs, traffic fines, vehicle registration, renewal and insurance fees, according to Azamn daily newspaper.

The reported move comes as Oman has run a 1.8 billion riyal (Dh17.09 billion) budget deficit so far this year, according to data provided by the Ministry of Finance.

Expatriate remittances stood at 35 billion riyals in the past five years, according to the Ministry of Finance’s figures.

The move has been approved by Oman’s elected Shura Council, the lower house of the Council of Oman, to overcome a budget deficit due to drop in oil prices in 2014.

Deficit

The projected deficit for 2015 budget stands at 2.5 billion riyals — an increase of 38.9 per cent compared to last year, according to the budget statement.

Among other options is reducing allowances for the government employees during official business trips.

With regard to employment, the government is expected to encourage the private sector to hire more Omani job seekers as well as to shrink the number of jobs in bloated government bodies.

Government-financed projects that do not directly add to the economy are expected to be halted until the recovery from the slump in the oil prices.

Gulf News contacted an official at the Ministry of Finance, but the official declined to give further details, stating that the study is conducted by the Minister’s Council, the cabinet.

Oman has said that by the beginning of next year, the government will gradually cut fuel subsidies.

The savings from the cuts will go directly towards the establishment of economic projects as well as efforts to curb fuel smuggling.

Subsidy cuts

An official from the Ministry of Finance confirmed last week to Gulf News that subsidies would be cut, adding that the reduction will be gradual in order to ensure that the public will not suffer from the move.

Subsidies on petroleum products, including petrol and diesel, are estimated to have cost Oman an estimated 900 million riyals (Dh8.56 billion) in 2015, compared to 840 million riyals in 2014.

Shura Council members earlier this year stressed the need to increase taxes on goods, which they said would contribute in the state’s budget significantly.

The customs taxes imposed by the government on various goods imported to the sultanate via border posts had recorded a remarkable increase, up 12.1 per cent in 2014, according to the Ministry of Finance figures.

The taxes contribution to the state’s budget exceeded 200 million riyals in 2014, compared to 172 million riyals in 2013.