Oman to increase taxes on wealthy in 2017 budget

Oman’s wealthiest will be targeted in a new taxation levy aimed at boosting government revenue, a senior official has said.

Plans for the oil-rich sultanate’s 2017 budget will include a new raft of austerity measures as the projected average price of a barrel of oil remains set to languish at $45 next year.

Measures suggested by Oman’s Shura Council this week include levies on ministers’ cars to ministry lights. 

Gasoline and diesel subsidies were cut earlier this year and similar cuts are planned for electricity and liquid petroleum gas.

The Ministry of Finance has issued 20 circulars so far this year aimed at controlling and managing spending.

However, the 2017 budget will not include any cut in wages and salaries as well as the basic services provided to citizens, Saleh Musin, head of the council’s Economic Committee, said.

The minister added that the budget would be similar to 2016’s, which predicted a OMR3.3bn (Dhs31.47bn) deficit.

“To increase non-oil revenues, Oman will increase taxes on individuals but the Economic Committee affirmed that levying taxes should apply on rich people, not middle and low income individuals,” Musin told Atheer news site.

“The region is entering an economic recession due to plunging oil prices,” he added.

Oman posted a budget deficit of OMR4.5bn in 2015, as revenues declined by more than 50 per cent following the oil price plummet from 2014.

The Shura Council referred the 2017 budget plans to the State Council on Monday for review.

The State Council will send its report to the Council of Ministers with its recommendations, along with that of the Shura.