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Oman mulls expat tax remittances

Oman mulls expat tax remittances
Oman’s Majlis Al Shura, or the lower house of the council of Oman, has approved the proposal for a two percent levy on the billions of rials that expatriates send home every year to bridge a budget deficit due to plunge in oil prices, reported Gulf News.

“The approval to tax expatriate remittances is one of the several steps proposed to overcome the budget deficit, which the sultanate will face while adjusting the oil price,” local media reported, quoting Shura member Tawfiq Al Lawati as saying.

The action would hit 1.9 million expats and may cause a rise in black market money transfers, according to a media report.

It is worth noting that the move resulted from a drop in global oil prices to a four-year low, with Brent crude, a benchmark for Middle Eastern oil, trading at $80 a barrel on Monday.

The Shura Council’s Economic and Finance committee made recommendations aimed at finding other sources of income aside from oil, which represents the bulk of the government’s revenues. The council also recommended that the predicted price of a barrel of oil in the 2015 budget should be decreased to $80 from $85. The budget is estimated to have a deficit OMR 500-700 million despite the revision, local media quoted Al Lawati as saying.

Around OMR 3 billion annually is remitted by expatriates, and a tax on the remittances is expected to bring in OMR 62 million of revenue to the government.

The Shura committee recommended cutting expenditure on government projects by five percent, revising the royalty fee on the trade of minerals from five percent to ten percent, the introduction of duties on exports of liquid natural gas.

The Shura council also recommended reducing the defense budget by five percent, a rare move for a Gulf state, among other recommendations.

The committee made a recommendation of reducing spending on oil production by five percent and spending on gas by five percent.