MoF official says private sector should take lead in boosting economic growth

December 23, 2018

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Oman’s future economic transformation should be led by the private sector, a Ministry of Finance official (MoF) has said. The official said this will help in the diversification process, reduce dependence on the hydrocarbon sector and accelerate non-oil economic activities.

Speaking to Muscat Daily on the sidelines of a workshop highlighting Oman’s budget held by the Government Communication Centre in coordination with the Ministry of Finance, Khalid Saif al Busaidi, an official at the Ministry of Finance, said, “The government is supporting the private sector to be the leader of economic growth, be the provider of jobs and many services.

“We are now working on the Public Private Partnership law whereby the government will distance itself from being the provider of certain services. For example, Oman Post will be handling the postal services of all government units over a period of time. We may be transferring the services to the public company but later on this could be privatised. This is in line with the privatisation process.”

Busaidi said other laws like the investment law, bankruptcy law and SME law will help put the private sector on the lead. “The government is contemplating on how to cut spending. One of the steps taken is to reduce our size and cut down on the number of services that we provide.”

In addition, Busaidi said the government is working to reduce the subsidy bill. “Most of the subsidies go to certain areas one of which is the energy sector. So, if the government wants to reduce subsidy on energy, we have to think of the social impact. We have to see who needs such subsidy in the community and this is one of the areas we are going to look at. All this will help in determining the financial situation of the country for future.”

Busaidi said that value added tax will be implemented in the fourth quarter of 2019 while excise tax is just waiting for the Royal Decree. “The excise tax will be 100 per cent on four items - alcohol, pork/ham, energy drinks and tobacco while fizzy drinks will bear 50 per cent tax. The general VAT will be five per cent.”

The Ministry of Finance will announce the 2019 budget on December 31.