Muscat: Social media users in Oman have started a campaign against owners of quarries for not paying enough taxes, particularly targeting two ministers.
The campaign appears to have been triggered by Sultan Al Abri, a Shura Council member representing Ibri province, who last week singled out the two ministers who own quarries in Musandam governorate and export their products outside the country, reported Al Zaman daily.
Last Tuesday, some 76 per cent of Oman’s elected consultative council members voted to levy taxes on crushers, quarries and minerals at 35 per cent of the total corporate profit.
Some social media users demanded the need to apply the law on everyone, while others pointed out that the two ministers had done nothing wrong by owning the quarries and that the amendment would also apply to them.
Al Zaman daily published a report in 2011 saying that the government distributed cheap licences to influential citizens to establish companies for the extraction of metals. Most of those licenses were subsequently sold to foreign investors who subsequently made sizeable profits.
The Omani government earlier admitted that there were irregularities in the mining sector in the past years and the Ministry of Commerce and Industry warned those who own quarry licences not to sell them to foreign companies.
In 2014, a Royal Decree was issued to establish a public body for mining that is concerned with the preparation of the strategy that includes plans and policies for basic geological structure of Oman as well as the development of the mining sector.
In last Tuesday’s amendment by the Shura Council, members also agreed that the tax on producers of liquid natural gas (LNG) would be raised to 55 per cent from 12 per cent to bring it in line with the levy on oil companies, while other firms related to the oil and gas industry would pay 35 per cent instead of 12 per cent.
The move comes to support the state’s coffers amid the plunge of the oil prices that has pushed the country’s budget deficit to 3.26 billion riyals (Dh31.01 billion).
Reports revealed that some companies working in the minerals and crushers sector make substantial profits with very low taxes that do not contribute much to the state’s coffers.
Dr Salah Mohsin, the head of the Economic Committee in the Shura Council, said that the foreign investors in Qalhat LNG and Oman LNG companies made huge profits in 2013 that were estimated to amount to more than 800 million riyals.
Dr Mohsin added that imposing 50 per cent of taxes will not pose harm to the investor, especially as many of them make huge profits.
Mohsin affirmed that taxes will be levied on the exported materials, which will result in the abundance of these materials in the local market.
Shura members said they approved the amendments in the Tax Income Law, as long as it will not affect the nationals’ standard of living.
The proposal of levying taxes was referred to the State’s Council for review and study before forwarding it to the Council of Ministers, the cabinet that is led by Sultan Qaboos.
The Omani government makes only 12 million riyals on taxes annually, and critics have said that figure is a pittance and not reflective of the large profits made by companies.
In November, Oman’s Shura Council hosted three ministers in a closed session to discuss the state’s general budget for 2016 as well as the ninth five-year plan (2016-2020).
Oil contributes up to 75 per cent of Oman’s revenues and any drop in oil prices has a direct impact on the budget.
