Oman announced this week that it will introduce VAT at a 5% rate on most goods and services from April 2021.This will be more than five years after the six GCC members agreed to introduce VAT in 2018 (MEES, 18 December 2015). To date only Saudi Arabia, UAE and Bahrain have implemented the tax. Kuwait has repeatedly pushed back implementation, while Qatar shows no sign of introducing VAT.
Muscat’s economy arguably faces the greatest challenges within the GCC with debt levels rising and new revenue streams are desperately needed (MEES, 13 March). The risk for the government is that VAT might curtail consumption. With the new Sultan Haitham also facing the difficult prospect of cutting public spending there is a risk of growing public discontent. (CONTINUED - 121 WORDS)