Oman Guide: What Is The VAT Impact On Medical Sector In Oman?

VAT in Oman
What Is The VAT Impact On Medical Sector In Oman

Battling against the crisis posed by the pandemic, the economy of Oman witnessed significant problems in recent times. To overcome the situation and help the economy grow again, the government of Oman decided to implement a value-added tax on various goods and services. The VAT in Oman is similar to that in the other GCC countries like UAE, Bahrain and KSA. However, Oman has implemented a relatively more lenient VAT system to avoid raising the cost of living too much. The VAT laws implemented since 16th April have exempted the healthcare sector.

Which healthcare goods and services are exempt from VAT for medical sector in Oman?

The VAT for medical sector in Oman exempts a majority of the healthcare services, along with the related goods and services. Zero rate would apply to the supply of medical equipment and drugs. One of the most notable things about the VAT systems on healthcare in the GCC countries is how they differ from each other. UAE applies zero rate on the healthcare sector, while KSA has implemented standard rates. Oman, on the other hand, has exempted only the healthcare institutions. The list of exempted goods and services in Oman is as follows:

  • General medical services
  • Specialised medical services
  • Physiotherapy services
  • Psychiatric services
  • Dental and laboratory services
  • Nursing services in hospitals, nursing homes and other licensed institutions
  • Surgical, reconstructive, and cosmetic services.
  • Diagnostic and therapeutic services for individuals
  • Midwifery services
  • Ambulance services to transport the wounded or the sick
  • Food and beverage or medical purposes
  • Provision of accommodation
  • Medicines and medical materials
  • Operating room expenses
  • Import of supplies used by charitable organisations
  • Items that are necessary for the individuals with disabilities.

Thus, a majority of the essential medical services are free of VAT in Oman, keeping public healthcare affordable. The VAT in Oman aims to help the economy in Oman regrow without burdening the citizens unnecessarily. However, it does not exempt commercial services like visitors’ parking, food and beverages for the visitors, telephone call allowances, television, etc.

What are the implications of the VAT in Oman?

As mentioned earlier, most of the healthcare services are exempt from VAT for medical sector in Oman, which implies that the cost of living wouldn’t rise much in terms of healthcare. The hospitals, however, would not be able to charge any extra taxes under VAT. Oman is known for its universal healthcare system that offers the citizens free services at the point of delivery. Expatriates, however, have to pay subsidised rates. The strategic planning behind the implementation of VAT in Oman and the exemptions would ensure a number of benefits.

  • The value-added taxes would strengthen the economy and help Oman keep up with the global competitiveness.
  • The government would utilise the tax collected in the form of VAT in supporting the nation’s infrastructure and improving the public services.
  • The exemptions that the healthcare sector would enjoy would help to keep it growing at a rapid rate.

With healthcare services and supplies exempted from VAT in Oman, the citizens of Oman can continue enjoying the necessary healthcare facilities the way they used to so far.
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