Muscat, July 31 - On the back of various fiscal measures undertaken by the Omani government, current revenues from taxes and fees registered an increase of 3.8 per cent last year.
The revenues, which amounted to RO 1,141.0 million in 2016, resulted from channels, including increase in fees for different licences and removal of exemptions on custom duties on import of some commodities.
There has also been an increase in customs duties on some commodities, including tobacco.
“With the exception of income tax on companies and establishments, all other major sub-components of the current receipts registered an increase in 2016,” the Central Bank of Oman reveals in a report.
Fees on licence increased by 9.1 per cent, while revenues generated from customs duties rose significantly by 28.7 per cent during 2016.
However, the share of taxes and fees revenues in other current revenues decreased to 54 per cent in 2016 from 58.9 per cent during 2015.
Tax on companies and establishments declined by 14 per cent in 2016.
Notwithstanding a pronounced fall in revenue from government investment, non-tax revenues increased by 2.3 per cent to RO 783.8 million in 2016 compared with a decline of 15 per cent in 2015, mainly on account of higher collections under water revenues, passport and immigration fees, compensation, fines and forfeitures, and public communication services toll.
“Nonetheless, the progress on macroeconomic reforms, such as introduction of excise and value added tax, approval for legislations on labour and foreign direct investment (FDI) would be paramount for shaping the medium-term outlook of the Omani economy, especially in the backdrop of expectations about low hydrocarbon prices,” the apex bank said.
Other items of current revenues, which witnessed growth during 2016, were a surplus income of 30.9 per cent from public authorities and 13.9 per cent rise in rent from government real estate properties.
At the same time, mining revenues witnessed a 22 per cent rise, and miscellaneous administrative fee and miscellaneous revenues registered one per cent and 2 per cent jump, respectively.
The government has already taken various measures to promote tourism, and expand manufacturing sector, but approval of the legislation on FDI would usher in increased participation of foreign investors, and accelerate the pace of economic diversification in the economy.
“Continuation of other ongoing fiscal reforms, viz., reduction in subsidies, containing current expenditure and prioritising capital expenditure etc would also remain a main catalyst for future macro outlook,” the CBO said in its report on Oman’s 2017 outlook.
Furthermore, the economic diversification with increased participation from the private sector would pave the way for sustainable growth in the economy, and therefore, emphasis on the same as part of the 9th Five-Year Development Plan and Tanfeedh need to be increased.
SAMUEL KUTTY
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