|By Arabian Post Staff| Oman surprised analysts and other members of GCC union, which have been preparing to roll out a new tax system from the first of new year, by announcing that it was postponing the implementation of VAT until 2019. According to the earlier schedule, the VAT implementation was to start on January 1, 2018. The Ministry of Finance announced that the application of selective tax on certain products will start by the middle of 2018. No further details were available immediately.
In November, 2016, Oman announced that it will implement value-added tax (VAT) by the beginning of 2018 in a move to diversify its revenues amid the decline in oil prices. The selective tax was to apply to all those products harmful to health such as alcohol, tobacco, ham and fizzy and energy drinks.
The estimated income from VAT, Oman could add between $520 million (200 million Omani riyals) and $779 million (300 million riyals) every year, according to the Ministry.
The proposal for the introduction of VAT was part of the joint efforts between Oman and other GCC states, which have been going on for a long time now. The postponement comes in the wake of reports that businesses were not yet ready for the implementation of the new tax regime, which calls for a major change in the way business was to be conducted in the sultanate.