VAT: Oman to initiate regular inspection nationwidetext_fields
The Consumer Protection Authority (CPA) of Oman has decided to look into unfair price rise and other illegal moves in the event of the introduction of value-added tax (VAT)in Oman.
The CPA will conduct regular inspections to ensure the proper application of VAT. Authorities will constantly monitor the price level of all products and any business or service firms found with any VAT-related slip ups will be fined.
The government has expanded the list of goods exempted from VAT, from 93 to 488 basic food commodities. Food commodities subject to zero value-added tax are fruits,vegetables, grains, dates, nuts, baby food,spices, oils, fish, red meat and poultry, in addition to dairy, cheese, tea, coffee, sugar, salt, and juices without added sugar or sweeteners.
Service sectors such as education and its related services, healthcare and related goods and services, resale and rent or lease of residential assets and local passenger transport have also been sidelined.
Similarly, the price of taxed products will increase by more than five per cent. Meanwhile, government sources revealed that firms have permission to pay VAT directly, whether the entire amount or just a part, without bearing it from customers. There are no penalties for institutions, shops and merchants that choose to bear this tax, sources added.
"With the implementation of VAT and the removal of subsidies on electricity and water, inflation is expected to rise. However, there is also a predicted decline in purchasing power, owing to the impact of the coronavirus, the cancellation of bonuses for government employees, and compulsory retirement for some of them. This will slightly reduce the rate of increased inflation," said Mohammed Al-Wardi, an economic analyst, to Times of Oman.
On April 16,Oman became the fourth GCC state to introduce a VAT system after UAE, Saudi Arabia and Bahrain. The implemented VAT rate in Oman is 5 per cent.