Oman to levy 100% tax on tobacco, alcohol, energy drinks from June 15

Oman plans to levy a 100 per cent tax on tobacco, alcohol, pork meat and energy drinks from June 15, the official Oman News Agency reported.

A 50 per cent tax on carbonated drinks will also be introduced, according to the Secretariat General for Taxation.

“The excise tax is a consumption tax and is considered to be indirect taxes. Thus, the final charge is on the consumers, but it is collected in advance at a stage of the supply chain, notably through the business sectors,” said Sulaiman bin Salim al-A’adi, director general of survey and tax agreements.

The taxes are in line with similar measures adopted by other GCC states including the UAE and Saudi Arabia to diversify the economy.

Oman could generate OMR100m ($259.7m) a year by implementing the selective tax on unhealthy products, the head of the economic and financial committee at the consultative Shura Council said in November.

“The implementation of this law will expand the tax base by providing the public budget with new tax revenue expected to reach OMR100 million per year,” Saleh bin Said Masan was quoted as saying by Times of Oman.

“The consumption of the taxed goods will decrease during the first year of implementation of the law by 15-20 per cent, which will improve the public health level.”

He added that a decline in demand for these products would also improve the sultanate’s trade balance.

Last month, Saudi also imposed a 100 per cent tax would be levied on electronic cigarettes and products used in them, and a 50 per cent tax on sugared drinks.

The kingdom already had a 100 per cent tax on cigarettes and tobacco products, a 100 per cent tax on energy drinks and a 50 per cent one on fizzy drinks.

Read: Saudi imposes tax on e-cigarettes and sugary drinks