Oman mandates tax stamps on imports of excisable beverages

MUSCAT, DEC 19

The rollout of Digital Tax Stamps – which must be affixed to merchandise liable for Excise Tax in the Sultanate of Oman – will be expanded to cover all imports of excisable beverage products with effect from January 31, 2025. The measure marks the third phase of a multi-year initiative launched by the Oman Tax Authority (OTA) to bring all excisable goods under its Tax Stamp programme. Under this programme, tax stamps bearing a unique marking or code containing digital data are affixed to specified excise goods to strengthen tax administration and compliance. These digital tags enable tax authorities to efficiently monitor, track, and trace the movement of excise goods throughout the supply chain. Under laws that came into force in mid-2019, the Sultanate of Oman began levying an excise tax ranging from 50 to 100 per cent on a range of merchandise, notably cigarettes and tobacco products, alcohols and spirits, and carbonated and energy drinks, among other products. The list of excisable goods was broadened in October 2020 to include a wide range of sugar-sweetened drinks, canned juices, and other ready-to-drink beverages. During a virtual workshop hosted recently with market stakeholders, tax officials unveiled strict timelines for the rollout of the third phase of the Tax Stamp programme, currently applicable only to cigarettes and other tobacco products. According to Deloitte, a leading provider of audit, consulting, tax, and legal services, the applicability of the Tax Stamp programme is being extended to a range of excisable beverage products, including carbonated drinks, sweetened drinks, and energy drinks sold across mainland Oman. Excluded from this scope, however, are duty-free sales and exports of such excise goods. In a tax advisory distributed to its client base, Deloitte noted that tax stamps must be affixed to excisable beverages entering the Sultanate of Oman for sale in the local market from January 31, 2025 – a mandate that will be enforced by Oman Customs effective from this deadline. Three months thereafter, on April 30, 2025, the trade and sale of any excisable beverage products in the local market – whether imported or produced in Oman – shall be prohibited if they fail to have tax stamps on them. This requirement will be enforced by inspectors of the Tax Authority. According to Deloitte, two marking methods will be available to stakeholders. The first is the ‘Direct to Products’ (DTP) technique, used in manufacturing industries, including heavily regulated sectors, to mark individual products with unique serial numbers. “It is formatted as a marker, printed by production line systems (i.e., manufacturing applications), and supports can/bottle carrier style,” the professional services firm explained. The second method involves Physical Markers. Here, manufacturers and importers of excisable beverages can apply the Physical Markers within a secured allocated area on each product. Formatted as "labels" (15mm x 15mm) and presented in reels (30K), they support manual application and prevent reuse due to enhanced frangibility. Importantly, tax stamps should be affixed on every single unit, whether or not they are sold as multiple units, added Deloitte in its advisory. Under a five-year contract signed by the Tax Authority in 2022, British-based digital solutions specialist De La Rue has introduced a tax stamp scheme that complies with the World Health Organisation's Framework Convention for Tobacco Control (FCTC) and product marking and serialisation for other excisable goods. The system combines secure printed tax stamps with digital tracking and will enable Oman to tighten control over suppliers' commitment to pay excise tax and to monitor the production and import processes of excisable goods.