Oman is reportedly expecting a 25 percent surge in its non-oil revenues this year, rising from $6.24 billion (2.4 billion Omani riyals) to around $8.3 billion (3.2 billion riyals) in 2020.
Khalid bin Saif Al-Busaidi, Director of media and communications at the Omans’ Ministry of Finance, said that the sultanate would implement a 5 percent value-added tax (VAT) in April that would generate about $779 million (300 million riyals).
It will lead to a rise in non-oil revenues, reflected in the reduction of the budget deficit and the reduction of oil dependence, he added.
As per the Finance Ministry budget statement, the estimated deficit for the current year is $5.8 billion (2.24 billion riyals), which is down from $10 billion (4.2 billion riyals) in 2020.
Mr. Al-Busaidi said the Ministry’s projected borrowing plan of approximately $4.1 billion (1.6 billion riyals) this year accounted for 73 percent of the overall expected deficit and included domestic and foreign borrowing.
He further pointed out that Oman is working to pay the debts within deadlines without rescheduling and, a new debt repayment provision would set up a financial reserve to pay future debts.
The Ministry has begun the transfer of $389 million (150 million riyals) for the current year and will double it for next year, reaching up to $1 billion (600 million riyals) by 2025, and aiming to meet all the dues of the sultanate.
Mr. Al-Busaidi stated that the 2021 budget was under the Omani 2040 Vision, which aimed to enhance spending efficiency and maintain the downward deficit until the surplus was achieved by 2025.
He concluded that while the ministries of finance and economy expressed the same objectives of reducing the deficit by spending cuts and growing non-oil revenues, they were also committed to improving economic activity and development and creating employment opportunities, especially in small and medium-sized enterprises (SMEs).