VAT preparations likely to get momentum as govt looks to introduce it in Sept 2019
Preparatory activities for introducing value added tax (VAT) in Oman is likely to gather momentum soon as the authorities are planning to implement the new tax regime from September 2019.
“Setting a target date of September 2019 allows businesses get time to plan the changes they need to make to their business processes,” Alkesh Joshi, tax partner at Ernst & Young (EY) Oman, said.
He said, “We are already seeing that businesses and consumers are asking more questions with respect to how VAT will impact them. This is a positive step in overall preparations for implementing VAT in Oman. We are seeing more preparatory activities and the public should not be surprised if awareness campaigns are launched sooner rather than later.”
Oman Chamber of Commerce and Industry (OCCI) had recently organised a special seminar to discuss value added tax. During the event, it was stated that the authorities are now targeting September 2019 to implement VAT in Oman, according to EY.
“The discussions at the seminar indicated that the authorities are now willing to engage further with the wider community to inform and provide more details about VAT,” Joshi said.
The speakers at the seminar included senior government representatives. The panel discussed the government’s purpose and objectives behind the introduction of VAT, and the potential impacts on the economy and business environment.
Earlier this year, when VAT was implement in the UAE and Saudi Arabia, there were some hiccups as many businesses waited for the law and regulations to be published before they begun preparing for VAT, which gave them a very short period for preparations.
“Our suggestions to the authorities would be to continue providing as much information as they can in respect of the VAT law so that various sectors can start preparing for it.” Joshi added.
Many industry and tax experts are predicting that even if VAT is implemented in the sultanate in 2019, food and beverage items [other than carbonated and energy drinks] are likely to remain outside the preview of VAT.
“In Oman, we expect any such VAT relief to be applicable to basic food items. The authorities will put out a list of items which are likely to be zero rated,” Joshi said. He further explained that such relief would be not be extended to carbonated and energy drinks as ‘we expect these products would likely be taxed. Furthermore, carbonated and energy drinks are likely to face an excise tax levy in addition to VAT.”