Oman’s Tax Authority has announced that the companies in the Sultanate can fully or partially cover the cost of the five percent value-added tax (VAT) on behalf of their customers.
VAT was officially introduced in the country on April 16, 2021. “Institutions, shops, and/or merchants have the freedom to choose to bear the value-added tax, which is determined at five percent for taxable goods, instead of the customer bearing this cost, whether it is the entire amount or just a part of the tax,” the official said.
There will be no penalties for institutions, shops, and merchants who want to pay this tax. “The decision to bear the fee, as well as the amount to be borne, will be taken by the owner of that particular establishment,” as per the authority official.
The Tax Authority has urged citizens to become acquainted with the goods and services that are not subject to taxation or are taxed at zero percent so that they are fully aware of how VAT affects their purchasing power.
The official also indicated that shops are well within their rights to post price lists of goods both before and after the tax was implemented.
Dr. Mohammed Al Wardi, an economic analyst in the region, has called on banks and other financial institutions to bear the costs of VAT for services given to customers during the difficult times brought about by the ongoing economic effects of the COVID-19 pandemic.
“With the implementation of VAT and the removal of subsidies on electricity and water, inflation is expected to rise. However, there is also a predicted decline in purchasing power, owing to the impact of the coronavirus, the cancellation of bonuses for government employees, and compulsory retirement for some of them. This will slightly reduce the rate of increased inflation,” Dr. Al Wardi added.