Oman Awaits Approval of Ambitious Tax, Subsidy Reforms

Oman Awaits Approval of Ambitious Tax, Subsidy Reforms

Oman’s top advisory body, the Shura Council, has voted for the biggest increase in corporate taxes in many years aimed at offsetting a budget deficit over oil price slump, reported Arabian Business.

The Council voted to raise the 12% corporate tax to the 15% rate with the original tax-free ceiling of $77,920 to be abolished, and all companies previously exempt from taxation to be taxed.

The hydrocarbon industry is also being targeted for tax reforms. LNG producers would have to pay 55% tax, up from the current 12%, while firms related to oil and gas would pay 35%.

According to Trade Arabia, any actual tax rise, however, would need to be approved by the cabinet. The finance ministry is expected to announce the 2016 budget at the start of 2016.

The Omani government has also been contemplating reducing domestic fuel subsidies. These moves have all been prompted by low oil prices with the resulting $8.5b deficit in the first ten months of 2015.

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