Muscat, Saud Nassir Al-Shukaili, Chairman of the Tax Authority, today issued Decision No. 53/2021 promulgating VAT Law’s executive regulation, based on the provisions of Royal Decree No. 121/2020 on VAT Law.
The bylaw includes all procedures related to general provision stated in the VAT Law, like registration, repayment, tax collection and details about the tax, including methods of objection and petition. The executive regulation consists of 13 parts comprising 211 articles.
He pointed out that some goods are charged zero tax and that Decision No. 2/2021 covers 93 such items, including medical drugs and equipment.
The Sultanate is expected to generate 1.5% of the value of Gross Domestic Product or RO 400 million per annum from the VAT, said al-Shukaili, noting that the VAT figures among the types of tax that do not affect the business sector and, instead, have a potential to generate abundant revenue as per its global applications.
Al-Shukaili affirmed that all preparations and necessary requirements have been finalized for the application of the VAT with effect from 16 April 2021. The steps included the issuance of statutes related to the VAT (the law and executive regulation), the operation of VAT computer system and electronic collection with the departments concerned.
In a statement to Oman News Agency (ONA), Al-Shukaili explained that the application of VAT is made in accordance with exhaustive studies undertaken over a long period of time. The studies covered the economic and social impacts of the VAT in the Sultanate.
Study in Oman showed that the impact of the VAT on consumers in the Sultanate will be minimal. The Sultanate applied zero-rate to basic commodities and exempted some domains like education, healthcare and financial services, said al-Shukaili.
The study in Oman also showed that tax returns from the VAT will contribute to supporting government spending on some services and infrastructure, and this will reflect positively on citizens’ life, al-Shukaili added.
Source: Oman News Agency