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  • 05-11-20

    Oman's new tax plan to improve budget shortfall

    (MENAFN) Oman plans to commence taking taxes from the income of rich citizens as of 2022, in an attempt to improve its decaying economy, making it a first-time move for the Gulf region.

    The project is the first step of an extensive plan to control the budget's shortfall that's ballooned because of low oil prices and the Covid-19 outbreak.

    The Ministry of Finance said in a written statement that the plan is predicted to reduce the shortfall of the budget that is projected to be almost 19 percent of gross domestic product in 2020, by the International Monetary Fund, to 1.7 percent by 2024, which will be achieved by decreasing government spending while encouraging investments, not to mention that proceeds from the income tax will be used to finance social programs.

    The chief of emerging markets economist Bloomberg, Ziad Daoud, declared: "Oman needed urgent action and the plan is a start. Some of the goals are ambitious to the point of unrealism such as the narrowing of the budget deficit to 1.7 percent of GDP in 2024 from 15.8 percent this year. Others could disrupt the political economy of rentierism such as the possible introduction of income taxes, although it's not clear if this will apply only to expatriates or to citizens as well."

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