Oman to impose 100% tax on tobacco, alcohol starting next week

Dubai

Oman will introduce 100 per cent tax on tobacco, alcohol and pork meat from June 15, as the sultanate follows other Gulf governments in trying to pare its reliance on oil revenue.

Energy drinks will also be subject to a 100 per cent levy and there will be a 50 per cent tax on carbonated drinks, according to the Secretariat General for Taxation website. The new taxes could generate about 100 million Omani riyals (Dh951.22 million, $260 million) annually, Saleh Bin Saeed Masan, head of the economic and financial committee at the Shura Council, said in November.

Oman delayed the introduction of the taxes by at least 18 months, even as the largest Arab crude producer outside Opec contends with lower oil prices and dwindling reserves. The country’s slow progress in making fiscal reforms has contributed to it slumping into junk grades at credit-rating providers, as well as fuelling concerns that it may need to follow Bahrain in seeking a bailout from wealthier neighbours.

Oman’s current account deficit may widen to 9.1 per cent this year, according to economist estimates compiled by Bloomberg. Economic growth may speed up to 2.3 per cent from 2.1 per cent, the data show.

On October 1, 2017, the UAE began taxing soft drinks and tobacco products as it attempted to curb the consumption of harmful products, and unlock new sources of state income.

Following more than two years of consultations with the private sector and the IMF, the UAE’s Excise Tax placed a 50 per cent levy on carbonated, sugary drinks, and a 100 per cent tax on energy drinks such as Red Bull, and tobacco products like cigarettes and shisha.

— With inputs from Ed Clowes, Staff Reporter