Oman invests $11.4m in VAT system

Oman is investing around $11.4m to implement a value added tax (VAT) system, the country’s Tender Board has announced.

In its fourth meeting of the year, the board approved nearly OMR29.5m ($76.5m) of projects and additional works, according to state-run Oman News Agency.

This included OMR 4.4m in a system for “added value tax for the Ministry of Finance”, OMR 24.92m to re-award the remainder of works for water supply to the Niyabat of Al Jabal Al AKhdar in the Wilayat of Nizwa and OMR98,026 for additional underground operation and maintenance works in the Governorate of A’Dhahirah.

Oman, like the other GCC countries, will implement a 5 per cent VAT rate from next year.

Around 94 food items and key services like healthcare and education will be exempt from the tax, which is expected to raise OMR300m ($779m) annually, according to reports in March last year.

Read: Oman could be first to launch VAT in GCC

Last month, the UAE’s Ministry of Finance announced that VAT registration for businesses would begin in the second half of the year.

A UAE federal tax authority will administer, collect and enforce taxes, perform audits and administer penalties in case of non-compliance.

Oman will likely use the funds to implement a similar system.

Read: VAT registration for UAE businesses to begin after June