Oman becomes the latest GCC country to introduce VAT

05:52 PM | 18 Apr, 2021
Oman becomes the latest GCC country to introduce VAT

OMAN – Oman has introduced a 5 percent value-added tax (VAT), becoming the fourth Gulf Cooperation Council country to implement a so-called consumption tax.

The move followed the UAE, Saudi Arabia and Bahrain.

Arab News reports that Oman has predicted it will raise OMR400 million ($1.04 billion) from the tax this year, equivalent to 1.5 percent of GDP, as it looks to narrow a widening fiscal deficit.

In June 2016, all six GCC states signed the Common VAT Agreement, pledging to introduce a 5% VAT rate.

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Qatar is expected to go ahead with VAT in the second or third quarter of this year and is said to be close to finalising its tax administration system, Dhareeba.

Goods and services exempt from VAT include financial services, health care, education, local passenger transport, bare land, resale of residential real estate and residential rents.

Zero-rated goods and services include all exports, basic foodstuffs, medicine and medical equipment, investment in gold, silver and platinum, crude oil and derivatives and natural gas, among certain transport goods.