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Oman to Impose Selective Taxes

General view after Cyclone Mekunu in Salalah, Oman May 26 2018. (Oman News Agency)
General view after Cyclone Mekunu in Salalah, Oman May 26 2018. (Oman News Agency)
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Oman to Impose Selective Taxes

General view after Cyclone Mekunu in Salalah, Oman May 26 2018. (Oman News Agency)
General view after Cyclone Mekunu in Salalah, Oman May 26 2018. (Oman News Agency)

Oman plans to impose a 100 percent tax on tobacco, alcohol, pork meat and energy drinks as of June 15 and a 50 percent tax on carbonated drinks, according to the Secretariat General for Taxation. 

The Sultanate is seeking to boost revenues by imposing selective taxes in order to avoid declining oil revenues.

The Secretariat confirmed that the “selective tax” is for “maintaining public health”, under the agreement established in 2016 between the GCC countries.

Director General of Survey and Tax Agreements Sulaiman bin al-Aadi noted that this is a consumption tax and is considered to be an indirect tax.

“Thus, the final charge is on the consumers, but it is collected in advance at a stage of the supply chain, notably through the business sectors.”

Oman has slowly embarked on fiscal reforms aimed at reducing the budget deficit while relying more on external financial resources through bonds and loans to compensate for treasury deficits.

Oman could generate around $260 million a year by implementing the selective tax on such products, the head of the economic and financial committee at the consultative Shura Council Saleh bin Said Masan said in November.

Oman’s economic growth may speed up to 2.3 percent from 2.1 percent, according to economist estimates compiled by Bloomberg. However, the data showed that the current account deficit may widen to 9.1 percent this year.

Bloomberg noted that Oman delayed the introduction of the taxes as concerns grew that it may follow Bahrain’s steps and seek a bailout from Gulf neighboring countries to speed its slow fiscal reforms.

The Sultanate originally planned to impose a value-added tax of five percent in 2018, but it is due to start in 2020.

In April, Standard & Poor's Global Ratings cut its outlook on Oman to negative from stable, saying the change reflected “the risk that in the absence of substantial fiscal measures to curtail the government deficit, or a more favorable external environment, fiscal and external buffers will continue to erode.” 

Earlier this year, Oman said it expected the budget deficit to reach $7.27 billion, equivalent to nine percent of GDP.

Last month, Oman hired a group of international banks for a planned bond issue which could go up to $2 billion in size, sources told Reuters. 

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Arab World

Israel’s Retaliatory Responses to Houthis Must Begin by Drawing Intelligence Plan

A person inspects damage at the site where a projectile fired from Yemen landed in Tel Aviv on December 21, 2024 (EPA)
A person inspects damage at the site where a projectile fired from Yemen landed in Tel Aviv on December 21, 2024 (EPA)
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Israel’s Retaliatory Responses to Houthis Must Begin by Drawing Intelligence Plan

A person inspects damage at the site where a projectile fired from Yemen landed in Tel Aviv on December 21, 2024 (EPA)
A person inspects damage at the site where a projectile fired from Yemen landed in Tel Aviv on December 21, 2024 (EPA)

Israel is considering options to respond to repeated attacks fired from Yemen in the past few days, the latest of which was a Houthi missile strike that injured more than a dozen people in Tel Aviv.
But military experts say Israel should first consider an intelligence plan for confronting the new front after it faced significant difficulties in both defending against and responding to the Houthi attacks.
On Saturday morning, Houthis launched a missile that triggered sirens throughout central Israel at 3:44 am. It was the second attack since Thursday.
Israel's military said the projectile landed in Tel Aviv's southern Jaffa area, adding that attempts to intercept a missile from Yemen failed.
“The incident is still being thoroughly investigated,” the army said, adding that following initial investigations by the Israeli Air Force and Home Front Command, “some of the conclusions have already been implemented, both regarding interception and early warning.”
Israeli military experts say the recent Houthi attacks have revealed serious security gaps in Israel's air defense systems.
“The pressing question now is why none of the other of Israel’s air defense layers managed to intercept the warhead,” wrote Yedioth Ahronoth's Ron Ben-Yishai. “The likely explanation is the late detection and the flat trajectory, which prevented the operation of all available defense apparatus.”
He said these incidents might expose a critical vulnerability in the army’s air defense system protecting Israel’s civilian and military home front.
According to Ben-Yishai, two main reasons might explain Saturday’s interception failure.
The first is that the missile was launched in a “flattened” ballistic trajectory, possibly from an unexpected direction.
As a result, Israeli defenses may not have identified it in time, leading to its late discovery and insufficient time for interceptors to operate.
He said the second, and more likely scenario is that Iran has developed a maneuverable warhead.
Such a warhead separates from the missile during the final third of its trajectory and maneuvers mid-flight—executing pre-programmed course changes—to hit its designated target, he wrote.
And while Israel has launched initial investigations into the failure of Israeli defense systems to intercept the missiles, it is now examining the nature, date and location of its response.
When Houthis launched their first missile attack on Israel last Thursday, Prime Minister Benjamin Netanyahu warned them, saying, “The Houthis will learn the hard way.”
But Israeli political analyst Avi Ashkenazi wrote in the Maariv newspaper that Israel should look at reality with open eyes and say out loud that it cannot deal with the Houthi threat from Yemen, and has failed to face them.
Last Thursday, 14 Israeli Air Force fighter jets, alongside refuelers and spy planes, flew some 2,000 kilometers and dropped over 60 munitions on Houthi “military targets” along Yemen’s western coast and near the capital Sanaa.
The targets included fuel and oil depots, two power stations, and eight tugboats used at the Houthi-controlled ports.
But the Maariv newspaper warned about the increasing involvement of Iran in supporting the Houthi forces.
“Iran has invested more in the Houthis in recent weeks following the collapse of the Shiite axis, making the Houthi movement a leader of this axis,” the newspaper noted.
Underscoring the failures of Israel’s air defense systems, Maariv said the “Arrow” missile defense system, Israel's main line of defense against ballistic missiles, had failed four times in a row to intercept missiles, including three launched from Yemen and one from Lebanon.
Yedioth Ahronoth's Ben-Yishai also warned that the threat posed by maneuvering warheads on Iran's heavy, long-range missiles would become existential for Israel should Iran succeed in developing nuclear warheads for these missiles.
Meanwhile, Israel’s Channel 12 said that in recent months, the Middle East has changed beyond recognition.
The channel said that for the first time in more than half a century, a direct and threat-free air corridor has been opened to Iran through the Middle East. Israel will benefit from this corridor to launch almost daily attacks on the border crossings between Syria and Lebanon, it said.
Channel 12 also reported that according to the Israeli military, the new threat-free corridor will help Israel launch a future attack on Iran's nuclear facilities.
“From Israel's perspective, the fall of the Assad regime and the collapse of the Iranian ring of fire are changing the balance of power in the Middle East,” the report added.