Developments on implementation of VAT
The draft VAT law that was referred by the Shura Council (lower house) to the State Council (upper house) has been presented to His Majesty, The Sultan for his approval as a matter of economic urgency. While there have been contradictory statements in the media regarding deferring implementation of VAT to 2022 or later, there is no official announcement from the Oman Tax Authority in this regard.
Oman implemented the Excise Tax on the following products with effect from 15 June 2019:
- Carbonated drinks (50%)
- Energy drinks (100%)
- Tobacco (100%)
- Alcohol (50%)
- Pork (100%)
Effective 1 July 2020, the Excise Tax rate on alcohol was increased to 100%. Effective 1 October 2020, Oman will implement Excise Tax at 50% on sweetened drinks/sugary drinks. These rate increases and expansion of the Excise Tax net is an additional burden on the hospitality industry in Oman.