Oman aims to put its economy back into track post the pandemic-hit period.
Sultanate of Oman has approved a new Economic Stimulus Package on Tuesday, with a mission to set back right the economy impacted by the spread of corona virus.
The package, approved by Sultan Haitham bin Tarik is addressing five main issues and includes reliefs relating to taxes and fees, stimulus to improve business and investment environment and incentives to boost small and medium enterprises. It also addresses various support measures for labour and employment market and banking and financial sector.
Among other key measures of the stimulus package are income tax reduction from 15 percent to 12 percent for SMEs for the financial year 2020 and 2021 and income tax exemption for all companies operating in economic diversification sectors with effect from January 2021 until December 2022.
Hotels will be exempted from tax for the financial years 2020 and 2021 and also Omanis who have been laid off and whose wages were reduced are awarded relief in repayment of loans until the end of September.
The package focuses more on economic diversification with an aim to reduce risk of business shut downs during the situations similar to pandemic. The emphasis is on agriculture and fisheries resources, mining and mineral products, cultural, logistics and educational activities.
The labor and employment related supports includes allocation of 20 million Omani Riyal in the 2021 budget for training and guiding job seekers and helping them to qualify to join the labour market.
Finding ways out of Budget Distress!
The sultanate hinted a fix to enhance fiscal order with plans to introduce VAT and tax incomes of wealthy individuals in 2022.
From discussing the possibility of getting financial aid from fellow GCC member states, the Sultanate has taken a turnaround strategy to stand on its own to boost and bring back the economy.
The fiscal adjustment plan known as Tawazun is all about Oman’s own economic strategy formulation and implementation. Along with announced economic stimulus package to support basic segments, SMEs and labour market, the fiscal recovery plan includes plan to tax the income of wealthy individuals in 2022, introducing VAT in April 2021 and cutting state subsidies on water and electricity.