Bahrain Mirror: As of April, the Sultanate of Oman imposes a 5% value-added tax on goods and services, becoming the fourth Gulf state to adopt this measure in the face of the collapse in oil prices, on which its economies depend heavily.

After the Kingdom of Saudi Arabia, the United Arab Emirates and Bahrain, Oman announced in October 2020 the imposition of this tax after the Sultanate also suffered strongly from the suspension of tourism due to the Covid-19 pandemic.

"On April 16, the application of the 5% value-added tax will begin," the Ministry of Information wrote in a tweet.

This "tax on consumption will be applied to all domestic and imported goods and services, except for those exempted from them," according to what was stated in the same tweet.

It added that the public transport sector, health services, the educational system, real estate, and "some financial activities" will not be covered by this tax.

Saudi Arabia and the UAE, which account for 75% of the GCC economies, were the first two countries to adopt a value-added tax in 2018 in an unprecedented decision in the region accustomed to the absence of taxes and to large subsidies thanks to gas and oil revenues, and Bahrain followed suit in January.

Saudi Arabia tripled the value-added tax in May as part of an austerity plan aimed at generating additional tax revenues and controlling public spending.

As for Qatar and Kuwait, which are also members of the Gulf Cooperation Council, they have not yet intended to impose a value-added tax.

The wealthy Gulf Arab states have suffered from the collapse in oil prices since 2014, especially Saudi Arabia, the world's largest oil exporter.

The health crisis exacerbated the financial difficulties of these countries with the slowdown in economic activity, especially tourism in the UAE and Oman.

Arabic Version