Muscat
Outward remittances from Oman’s expatriate community stood at 3.7 billion Omani riyals (Dh35.21 billion) in 2017, according to the Central Bank of Oman (CBO).
There was a slight drop from the 3.95 billion riyals the previous year.
Worker-related remittances surged from 2.193 billion riyals in 2010 to 2.774 billion riyals a year later. In 2012, the figure jumped to 3.109 billion riyals, climbing to 3.501 billion riyals in 2013 before topping 3.961 billion riyals in 2014. It crossed the 4 billion-riyal mark in 2015.
Blue collar workers make up a growing proportion of the sultanate’s guest workforce, their numbers boosted by the demand for low and semi-skilled construction, contracting and maintenance workers necessary to implement major oilfield, petrochemical, tourism and infrastructure projects.
The number of expatriate workers in the private sector stood at over 1.6 million in 2017, according to the National Centre for the Statistics and Information (NCSI).
Kuwait was the first among the Gulf states that decided to levy tax on remittances as a way of raising alternative sources of income.
Mohamad Al Hadrami, an economic expert, told Gulf News that a law should be introduced to impose a certain amount of fees for the country for any foreign exchange transfer. “I believe it’s a right time to introduce that, so the country as least will help fill the state’s coffers,” he said.
Ahmad Al Beloushi, another economic expert, said imposing taxes on expat remittances will most affect the low-income expats workers in the country. “I don’t think it’s a good idea in the current time as Oman is looking forward for more investment and implementing more mega projects,” said Al Beloushi.
In February, remittances are placed under greater scrutiny in Oman in a bid to tackle money laundering.
The new system implemented, named Enhanced Due Diligence, has been introduced to target high-risk and high-net worth customers engaged in large transactions or money exchanges, the report added.
Under the new scheme, customers sending money abroad or exchanging currencies will have to declare the source of their funds and provide evidence of the source — such as a bonus, salary advances or bank loans, if the amount is larger than their income.
In 2016, CBO affirmed that expat remittances will not be taxed as levying taxes on expatriates is subject to several considerations.
“From the legal aspect, the International Monetary Fund (IMF) agreement, which Oman is committed to, stipulates that no restrictions should be imposed on transfers and payments classified as current international transactions,” the CBO said.
In November 2014, the proposal for a 2 per cent levy on the billions of riyals that expatriates send home every year was approved by Oman’s Majlis Al Shura, the lower elected house of the Council of Oman, to overcome a budget deficit due to a slump in oil prices. But it was later dismissed by the appointed State Council.
