Oman’s Shura Council argues for lifting of family visa restrictions

Royal Oman Police imposed restrictions on family visas in 2013

Oman could become the first country in the Gulf Cooperation Council to introduce value added tax as it looks to raise revenues, according to reports. Oman Daily Observer cites an official familiar with the matter as saying the “final touches” are being made to the country’s draft law relating to VAT. “It is only a matter of timing,” he said, without specifying the tax rate. "There will be no exemptions, and all consumers will pay the VAT upon its implementation," he said, adding, "key sectors, sectors such as health, education and social services may not be included in the new tax net". The source said around 94 food items would also be exempt and the country expected to raise OMR 300m ($779m) each year from the levy for state coffers. However, he ruled out any plans to introduce income tax in the country, according to the publication. A GCC-wide agreement to implement a VAT rate of 5 per cent is in the works with the UAE already confirming its plans. Last month, the emirates said it would implement the levy from January 1 2018. Under the agreement, UAE minister of state for financial affairs Obaid Humaid Al Tayer said other countries in the region would have until January 1 2019 to follow suit. He said at least 100 foot items, bicycles, healthcare and education would be exempt from VAT, which is expected to raise Dhs 12bn ($3.2bn) for the country in its first year. In a report this month, consultancy firm EY’s MENA indirect tax leader Finbarr Sexton said VAT would have a “broad impact” on businesses in the region. “It will diversify government revenue sources and reduce reliance on oil revenues to finance government expenditures,” he said. “The additional revenues collected are likely to fund programmes for the development of job opportunities for nationals and improve education and healthcare in the GCC.” But he warned that there would be severe penalties for non-compliance. “All businesses must undertake a review of their current contracts to determine if VAT has been appropriately addressed,” he said. The implementation of VAT in the GCC is being driven by a prolonged decline in Brent crude prices from a $115-per-barrel peak in mid-2014 to around $40 this month. GCC countries are expected to post average fiscal deficits of 16 per cent this year, with a $275bn regional shortfall, according to the International Monetary Fund. Related articles VAT could become additional cost for GCC businesses Industry GCC Rail Completion Date Could Be Pushed To 2020 - UAE Minister Industry UAE Launches Strategy To Become Most Innovative Country In Seven Years Industry Newsletter Subscribe to get a Gulf Business update each day. By Robert Anderson Email Robert Latest More senior executives at Abu Dhabi bank FGB depart Emirates would buy more A380s even if new version shelved Saudi Aramco prepares for global expansion as IPO looms UAE workers say CEOs accountable for data breaches

Members of Oman’s Shura Council are arguing for a restriction preventing expat employees earning less than OMR 600 ($1,558) a month from bringing their families to the country to be lifted, according to reports.

Times of Oman cited members of the country’s consultative assembly as saying lowering the minimum wage requirement would help the country’s economy.

Royal Oman Police brought in the OMR 600-restriction in September 2013.

“The parliament has forwarded some questions to the ROP on why a salary limit has been set. The ROP might have considered different aspects while deciding on the limit,” Majlis Al Shura member Rashid Al Shamsi told the publication.

“However, lowering down the salary limit for family status will help expats in Oman to bring in their families, which will boost spending and help the economy.”

The Shura member said expats would spend more in Oman if their family were with them, rather than remitting money to their home country.

Oman currently has 1.74 million expat workers, with a total of 2.02 million expats including family members.

The publication spoke to several local expat figures that supported the move. However, Competence HR general manager Tonia Gray said that lifting the restriction could place greater costs on employers in terms of health insurance, flights and education, which would not be welcome in the current climate.

Oman is expected to post a budget deficit of OMR 3.3bn ($8.6bn) in 2016 due to a reduction in oil revenues.

The country has cut fuel subsidies and is also reining in public worker benefits to reduce spending.

Read: Oman to cut public authority worker benefits

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