Oman's Ministry of Finance has announced a Medium-Term Fiscal Plan 2020-2024 to achieve sustainable levels of fiscal balance by the end of 2024 and establish suitable conditions to support Oman Vision 2040.
The plan says the government is looking at all sources of revenue in order to plug the gap in budget deficit and this includes looking at personal income tax.
Personal income tax is widely used as a tool to diversify governments' revenues. Currently, the government is evaluating the tax and how it can best be implemented, the plan says.
The government will evaluate the tax and how it can best be implemented. It will study all aspects including societal, economic and fiscal impacts.
Oman's Ruler His Majesty Sultan Haitham Bin Tarik said in a message in the plan: "We will be committed to directing our financial resources in the most ideal manner which will ensure the reduction of debt and the increase of income. we will direct the government to implement a more efficient system of managment which places, on top of its priorities, financial balance, economic diversification, the sustainablity of the national economy, besides developing all relevant laws and regulations."
The plan includes initiatives, some of which have already been started to be implemented, while the rest will follow suit according to priorities and readiness, the ministry said.
An approach of gradual implementation of procedures will be taken into account to accommodate economic and social impacts resulting from the plan once a Comprehensive Social Security Scheme is endorsed in favour of low-income segments, with a view to protecting them against the effects of some financial policies, it said.
The plan’s announcement comes in response to the current circumstances dictated by the slump in oil prices and coronavirus (Covid-19) pandemic, both of which wreaked havoc on the global economy, causing record decline on demand for energy, which, accordingly, impacted various economic sectors.
By implementing financial initiatives and policies of this plan, the Sultanate seeks to avoid making deficits and relegating in its credit ratings. In the meantime, it will work to achieve safe and attractive investment grades, it said.
The plan targets government revenues of OR8.6 billion in 2020; OR9.28 billion in 2021; OR10.21 billion in 2022; OR11.53 billion in 2023 and OR12.095 billion in 2024. The targeted expenditure during the four years are: OR12.66 billion in 2020; OR12.482 billion in 2021; OR12.798 billion in 2022; OR12.639 billion in 2023; and OR12.632 billion in 2024. The deficit will move from 15.8% in 2020 to 1.7% in 2024.
Non-oil's share of the total revenues will increase from 28% in 2020 to 35% in 2024. - TradeArabia News Service