Muscat: Oman on Sunday released the 2016 General Budget, which focuses heavily on austerity measures, including starting from minister’s cars to the ministries lights.
The new budget projects 3.3 billion Omani riyals (Dh31.47 billion) in deficit spending for 2016, which is says it will try to reduce by improving the non-oil revenues as well as cutting expenditures. Oman posted a budget deficit of 4.5 billion riyals in 2015, as revenues declined by more than 50 per cent.
According to a statement from the Omani government, the 2016 general budget aims to stimulate economic growth through continued development spending on the economic and social priority projects and to provide the necessary support to further private sector investments.
It also aims to increase the contribution of non-oil revenues in total revenues and reduce dependence on oil revenues, and establish of holding companies to develop plans and strategies.
To boost revenue, the Ministry of Finance will raise income tax rates on companies and institutions and reduce the number of tax exemptions.
The budget will also apply the new automated accounting system for calculating taxes at all border posts and collecting fees on clearances and labour cards. It amends the tariffs for water and electricity for commercial, industrial and government use and amend fees on some services provided by the government. It also raises fees of registering and renewal of vehicles and driving licences.
The reduce government spending, the Omani government has cut subsidies on petrol.
The new budget also halts expansions of organisational structure of ministries and government units and stops provisions of family and tour vehicles for ministers, undersecretaries and other senior officials. It also prohibits use of government vehicles beyond official working hours and rations fuel use.
It also reviewed the vehicle fleet for each government unit, reduced training courses outside the country, encouraged officials to use the Omani post or e-mails, cuts spending on hospitality as well as “unnecessary administrative spending”.
It also aims to cut down on power consumptions by replacing all lighting with energy-saving LED bulbs and assign all electricity and water maintenance work to private companies.
The statement said that the government had issued the budget following the slump of the oil prices and the uncertainty and ambiguity of the future oil price.
By the Numbers
The public revenues from oil and gas consist of 6.15 billion riyals, which constitutes 72 per cent of the total revenues in 2016.
The non-oil revenues are estimated to reach 2.45 billion riyals in 2016, compared to 1.9 billion riyal in 2015, due to the oil [prices slide.
The public expenditure is estimated to 11.9 billion in 2016, while the oil and gas spending are estimated to reach 1.79 billion riays.
The ministries units spending are estimated to 4.6 billion riyals including employees’ salaries in 2016, with a decline of 12 per cent compared to 2015.
Spending on defence and national security has declined by 12 per cent in 2016, reaching 3.5 billion riyal.
The allocated subsidy for the petroleum products and electricity in the approved 2016 budget is estimated to reach 400 million riyal, with a decline of 64 per cent.