Dubai: Oman is not planning to increase the value-added tax (VAT) beyond the current rate of 5 per cent, the Minister of Finance said yesterday.
Speaking during a press conference to announce the proposed state budget for the year 2022, Sultan bin Salim Al Habsi said the current VAT rate will remain unchanged.
This comes after Bahrain’s parliament approved the doubling of VAT to 10 per cent. “We have seen some countries increasing the VAT tariff but our government has no intention of increasing the current VAT,” Al Habsi said.
According to Bahraini media, the doubling of VAT is a fiscal reform that is part of plans to boost revenues and sustain the Kingdom’s economic progress and recovery from the coronavirus pandemic.
On May 11, 2020, Saudi Arabia tripled the VAT from 5 per cent to 15 per cent as part of several measures to counter the financial and economic impact of COVID-19 on the government budget.
Oman became the fourth Gulf state to implement VAT, with a flat 5 per cent being imposed on a range of goods and services from April 16, 2021.