Exclusive: 28.4% increase in corporate tax revenues in 2018

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هذه الصفحة متوفرة بهذه اللغة: العربية

27 July 2019

MUSCAT (WAF) – The corporate income tax amounted to RO 466.368 million in 2018, compared to RO 363,417 million in 2017, the annual report of the Secretariat General of Taxation (SGT) at the Ministry of Finance shows.

The increase in the corporate tax income for 2018 was a result of a number of factors including: the increase in oil prices which resulted in an improvement in the profits of companies operating in the oil and gas sector in particular, and other companies in general, the cancellation of the legal exemption limit of RO 30,000 and raising the corporate tax rate from 12 to 15%.

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The increase is also a direct result to the new Income Tax Law – issued in 2017 – which included a 10% withholding tax applicable on dividends and interest. However, in May, the Omani government approved the suspension of this tax for 3 years. The decision is expected to impact negatively the tax retunes, but is aimed at encouraging foreign investments.

The significant increase in the audited financial statements submitted by the companies also contributed to the collection of higher tax revenues, by limiting tax evasion cases.

SOEs

According to the data obtained by WAF News from SGT, 95 state-owned enterprises (SOEs) paid RO285mn in taxes from 2015-2017. SOEs in losses or ends their first financial years after December 2016 are not included.

As of 2016, the government started transferring its assets to sector-based holding groups, which resulted in establishing dozens of joint stock companies, and limited liabilities companies as special purpose vehicle. Most of these entities are not included as tax payers till 2017.

The annual report for the year 2018 issued by SGT indicates the large gap between the number of companies registered with the Secretariat compared to those registered with the Ministry of Commerce and Industry.

According to MoCI’s Renaissance Day report, the number of commercial registrations (CRs) exceeded one million commercial records by the end of December 2018. And the number of CRs by end of June 2019 was 1102366; Oman News Agency said quoting MoCI’s report. While the number of taxpayers registered with SGT, as shown in the annual report, by the end of 2018 is only 120314.

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