Oman’s reform plans worry activists

      Published on Tuesday, 10 November , 2020      606 Views     
Oman’s reform plans worry activists

  • Oman News

Oman announced it plans to levy an income tax on wealthy individuals beginning in 2022.

The measure, if implemented, would signal a turning point in a region where tax-free income is the norm.

German diplomat Joachim Duster has closely followed Gulf affairs since the 1970s and told Al-Monitor, “Oman is waking up to the realities of this world.”

But the clock is ticking, and a repeatedly delayed 5% value-added tax is expected to be introduced in April 2021, as government coffers are at risk of further depletion.

Oman is on track to post its seventh straight year in the red while public debt is expected to reach 80% of gross domestic product this year, 16 times more than the number in 2014.

“It is the middle class that is going to be hit badly … I think the upper-income class will find ways to evade the personal income tax,” Abdullah Baabood, visiting professor at Waseda University, Tokyo, told Al-Monitor.

At a time when future global oil demand is uncertain, the Gulf state still relies on oil sales for half of its annual revenues. Sworn in Jan. 11, Sultan Haitham bin Tariq Al Said inherited a cash-strapped country from his predecessor, known to be the “father of modern Oman.”

“Sultan Qaboos was moving Oman into a rentier state, while Haitham’s task, in a way, is to move the country out of it,” Duster said. The coronavirus pandemic helped the ruler to rally public support, he added, “in normal times, people would have protested.”

Category Oman News | 2020/11/10 latest update at 6:20 PM
Source : Al Monitor | Photocredit : Google
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