The recently implemented VAT in Oman comes with a number of exemptions, keeping in view the impact that it would have on the society. The government has published the VAT law solely to boost up the economy with the necessary influx of additional finances. However, it does not intend to raise the cost of living or make it hard to afford the essential items. This is why, the law does not impose any VAT for non-profit organizations in Oman when it comes to charitable supplies. This is indeed a great thing as it would allow the NGOs to keep helping those in need.

What expenses made by NGOs are exempt from VAT in Oman?

The NGOs generally raise funds to purchase a variety of supplies for those in need. These supplies are aimed to cover the basic needs of the beneficiaries. In many cases, these supplies help the poor enjoy a contemporary lifestyle. The exemption of VAT for non-profit organizations in Oman covers the supply of:

• Clothing: Clothing is indeed one of the basic needs that many underprivileged individuals struggle to meet. In fact, it is one of the most common supplies sought after by many NGOs. This implies that the non-profit organisations spend significantly on clothing and the exemption from VAT in Oman would benefit them a lot.
• Hygiene products: Various hygiene products, such as diapers, toilet paper, dental care products and female hygiene items are quite essential. The charitable NGOs require supplies of these products in order to ensure that the basic needs of the poor are covered.
• Toys and games: The NGOs that run orphanages or simply extend various forms of assistance to children often provide them with toys and games.
• Blankets: The homeless people are particularly the ones that require blanket donations to keep themselves warm. Hence, plenty of NGOs that help the homeless provide them with blankets on a regular basis. As the government would not charge VAT for non-profit organizations in Oman, the NGOs can keep doing it without added costs.
• School supplies Many of the non-profit organisations help needy children with educational supplies. These include notebooks, pencils, pens, backpacks, etc.

Thus, the NGOs would not have to pay VAT in Oman for the supply of such items, along with various other supplies too. For instance, many non-profit organisations also help the needy with food, for which they require the supply of spices, cereals and other ingredients.

How would the exemption of VAT for non-profit organizations in Oman be beneficial?

The non-profit organisations often rely solely on charitable financial donations and other forms of assistance in order to run. An increase in the cost of the supplies due to the implementation of VAT for non-profit organizations in Oman would have undoubtedly made them more expensive. This would have put the NGOs in a difficult situation, especially if they are already struggling due to a shortage of funds.

The impact of the pandemic on the economy of Oman has been huge and almost every sector suffered from it. It is quite natural that many of the NGOs would have a hard time trying to continue helping those in need. The strategic implementation of VAT in Oman with an exemption to the NGOs would make the tax beneficial to the economy without being detrimental to charitable activities.
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