BENEFITS OF VAT IN OMAN?
Value Added Tax is an indirect tax on the consumption of goods and services i.e it is a tax on the value added at every stage of production right from the manufacturer to the ultimate consumer. Since this is a tax on consumption, it will contribute a major part of the revenue of the Government.
The implementation of Value Added Tax will be a milestone in Oman. It will help not only in the growth of the economy but also act as an aid in the development of the Oman State as a whole. The result of its implementation with regards to diversifying its economy would prove to be one of the necessary steps that the state takes in this decade.
There are a lot of Advantages of introducing VAT in Oman. A few of the major benefits from the implementation of VAT are explained below:
- Diversification of the Oman economy as a whole: Implementation of Oman VAT Law will be beneficial for diversification of the Oman economy as a whole as it will lead the nation‘s economy to expand and at the same time help the government to reduce its dependence on the oil and gas sector. This in turn will help to uplift the economy gradually over a period of time.
- Oman VAT Law encourages the habit of saving: The implementation of VAT would be beneficial for the whole society of Oman as the people would now spend money wisely. People would purchase those things that are only absolutely needed and sensible items. This will create a rational spending habit on them and cultivate the habit of savings on their income.
- Oman VAT ensures the welfare of the Public: The implementation of Oman VAT Law will contribute to a major share of the revenue for the government which can be used for the development of various projects including health facilities, construction of roads, providing proper infrastructure, etc. leading to prosperity and well-being of the people.
- No Evasion of Tax after implementation of Oman VAT Law: As compared to the other taxes that are levied, the chances of evading this type of tax by the people which will prove very beneficial for them in the long run are very limited.
- Higher Living Standards under Oman VAT Law: Since Oman VAT Law will contribute to a major share of the revenue for the government, it would help in providing the necessary funds to the government so that it could focus on the various developmental activities and thereby slowly increase the standard of living of the people.
With so many advantages, the postponement of VAT implementation in Oman is due to slow economic performance and low consumer sentiment. In spite of all these, Oman looks forward to the implementation of Value Added Tax in 2021. It can utilize the knowledge gained from the implementation of three other member states of GCC. The Office of the Ministry of Finance has stated that the exclusion of VAT from the 2020 budget does not preclude it from a launch in 2021 and is all set to prepare the economy for implementation of Value Added Tax.
Aviaan accounting offers various Oman VAT consultation services to assist business entities in understanding and applying VAT.
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