Muscat: The Economic Stimulus Plan (ESP) approved by Oman’s Sultan Haitham bin Tarik on Tuesday aims to put Oman back on track of economic recovery post the setback due to COVID-19 pandemic.
A set of mechanisms and procedures has been adopted to ensure a speedy recovery of economic activities. In October 2020, Oman’s Ministry of Economy set up a working group to develop policies and programmes to stimulate the Omani economy.
The ESP that was announced yesterday, March 9, is expected to auger well for the recovery of the local market, apart from providing the much needed stimuli to small and medium enterprises, which was poised for a good take off before the pandemic. The plans factored in the ESP will also attract more investments into Oman and improve the business environment. Furthermore those sectors that were identified for economic diversification as part of the tenth FYP (five year plan) will receive a further shot in the arm with the ESP announced now.
A buffer of protection for companies planning to exit due to temporary economic setback is also provisioned per the plan. Importantly, plans to provide employment opportunities in the local labour market have been amply provisioned through incentives for companies appointing Omanis and achieving Omanisation targets. An amount of RO 20 million has been allocated to train and qualify Omani jobseekers to be appointed in government and private sectors. Reduction in expat labour permit fees and reduced license fees for employing expats for those companies that have achieved Omanisation percentage has also been promulgated in the ESP.
Among other salient points of ESP are exemption of income tax for all companies that operate in economic diversification sectors with effect from January 2021 until the end of 2022, reduction of income tax rate from 15 per cent to 12 per cent for SMEs for the tax years 2020 and 2021, exemption of tax for hotel establishments for the tax years 2020 and 2021 and postponement of repayment of loans taken by Omanis who have been laid-off and those whose wages were reduced until the end of September of this year.