Oman to levy 5% VAT from next month
It is estimated that VAT will raise around 400 million Omani riyals per year.
Oman will start implementing five per cent value-added tax (VAT) from April 16, Oman News Agency reported on Sunday
It is estimated that VAT will contribute 1.5 per cent towards the country’s gross domestic product (GDP) and raise around 400 million Omani riyals (Dh3.8 billion; $1 billion) per year for the country’s exchequer.
The implementation of VAT comes in line with the GCC framework that was agreed between the six nation bloc. The UAE and Saudi Arabia levied five per cent VAT on January 1, 2018 followed by Bahrain. Saudi Arabia later hiked VAT to 15 per cent amidst shortfall in revenues due to plunge in oil prices.
A study by EY had predicted that the adoption of VAT by GCC countries would generate additional annual revenues of $25 billion.
Saud bin Nasser bin Rashid Al Shukaili, chairman of the Tax Authority in Oman, said all necessary preparations and requirements to implement VAT from April 16 have been completed.
Oman’s tax authority had opened registration process for the companies to register in the special tax system in February last year.
He explained that companies have been given the necessary time to prepare their accounting systems and other measures for tax compliance.
UAE businesses that must register in anti-money laundering systems
The Ministry of Economy (MoE) has listed the businesses that need to register in the anti-money laundering systems before March 31.
These include real estate agents, gold dealers, auditors, and service providers for companies.
Referred to as designated non-financial businesses and professions (DNFBPs), they have been asked to register in the Financial Intelligence Unit (goAML) and the Committee for Commodities Subject to Import and Export Control system (Automatic Reporting System for Sanctions Lists).
Such businesses were given an extended grace period till March 31 to register, in order to avoid penalties, which include licence cancellation and closure.
It is among the several measures adopted by the government to combat money laundering and financing of terrorism in the UAE.
The MoE also underlined the importance of adopting measures to counter money laundering. Failure to do so result in fines ranging from Dh50,000 to Dh1 million – which can be doubled to as much as Dh5 million.
The ministry explained that a wide range of non-financial business and activities are “most exposed to money laundering risks”. These have been divided into four main categories.
>> Brokers and real estate agents: When entering into operations in the interest of their clients for purchase and sale of real estate.
>> Dealers of precious metals and gemstones: When they perform any single-cash transaction or several seemingly related transactions with a value of Dh55,000 or more.
>> Independent auditors and accountants: When they prepare, conduct or implement financial operations for the benefit of their clients, related to the following activities:
– Buying and selling real estate.
– Managing money that the client owns.
– Managing financial, savings or stock accounts.
– Contributing to establishing, operating or managing companies.
– Establishing, operating or managing companies, or legal arrangements.
– Buying and selling commercial entities.
>> Corporate service providers and trust funds: When they undertake or execute an operation for the benefit of their clients or on their behalf in relation to the following activities:
– Work as an agent in establishing companies.
– Working or preparing someone else to work as a director or company secretary, or as a partner in the company.
– Providing a registered office, business address, place of residence, address for correspondence, administrative address of a legal person, or legal arrangement.
– Act as trustee for a direct trust fund or to perform a similar function for another form of legal arrangement.
– Working or preparing another person to act as a shareholder for another person.
Covid: Freeze on Dubai Govt fees extended till 2023
Government fees will not be hiked, nor will new fees be introduced.
A freeze on government service fees in place in Dubai has been extended till 2023. Apart from the extension of the freeze, no new fees will be imposed, except when introducing “new vital services”.
The three-year freeze announced in March 2018 will continue to be in place. The decision will help ensure economic and social stability as the world reels under the impact of Covid-19.
The move is in line with the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.
Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council, issued the decision on Tuesday to strengthen the Emirate’s competitiveness, attract entrepreneurs and investors, and keep pace with market trends.
The Crown Prince said the move helps raise the resilience of Dubai’s businesses and eases any financial challenges they may have due to the prevailing situation.
The decision also demonstrates Dubai government’s flexibility and agility in dealing with a “shifting global socio-economic landscape”.
The move complements the five economic stimulus packages launched by the Dubai Government since March 2020 with the aim of helping businesses tide over the repercussions of the pandemic.
The wide-ranging support measures worth Dh7.1 billion ensured that the short-term impact of Covid-19 did not translate into long-term economic challenges.
Oman to offer investors long-term residency; cut income tax on SMEs
Oman is one of the Gulf’s weakest economies and was hit hard by the coronavirus pandemic and low oil prices.
Oman will reduce income tax for small and medium businesses for 2020 and 2021 and will offer long-term residency permits for foreign investors, state TV said on Tuesday.
The plans announced on state media are part of Oman’s Vision 2040 aimed at diversifying the economy away from oil, which makes up the bulk of state revenues.
Oman is one of the Gulf’s weakest economies and was hit hard by the coronavirus pandemic and low oil prices. The International Monetary Fund said last month its economy likely shrank 6.4 per cent in 2020 and estimated it would make a modest recovery to 1.8 per cent growth this year.
The measures also include income tax being reduced for companies in sectors aimed at economic diversification that will begin operating this year.
Oman will also cut rent at the Duqm Special Economic Zone and industrial areas until the end of 2022.
It said granting longer residencies for foreign investors would be done “in accordance with specific controls and conditions that will be announced later after their study is completed by the Council of Ministers, in addition to incentives related to the market.”
The cabinet also approved a long-term urban growth strategy that “is considered a key enabler for achieving Oman Vision 2040,” state TV said citing Oman’s ruler, Sultan Haitham bin Tariq Al Said.