Budget gets Oman Cabinet's nod; oil prices to rise
It will see Oman raising oil product prices, cut expenditures, boost non-oil sector, and raise corporate income taxes
Oman’s budget for next year was approved by the Council of Ministers on Wednesday, the Times of Oman newspaper reported.
It will see Oman raising oil product prices, cut expenditures, boost non-oil sector, and raise corporate income taxes.
The budget, aimed at covering an expected shortfall in the next year, is awaiting His Majesty Sultan Qaboos bin Said’s ratification before it is implemented.
According to an official statement, Oman will cut down on government spending, develop non-oil revenues by raising corporate income tax, and revise and raise fees payable against government services, as well as revise the prices of petroleum products (oil products) ‘in a manner that corresponds with global prices of these products with effect from mid-January 2016’.
Following the keenness of the Council of Ministers to minimise the impact of these procedures, the statement said, the Council had instructed the Public Authority for Consumer Protection (PACP) to intensify its monitoring of prices ‘to avoid the occurrence of any unjustifiable increase in prices that might go beyond the direct impact of these procedures’.
The government posted a budget deficit of $8.5bn in the first ten months of this year, swinging from a $492.46mn surplus a year earlier, the Finance Ministry data shows, mainly due to a dip in oil revenue that affected the fiscal balance.
The country had planned its budget for this year, based on the expectation of an oil price of $75 per barrel. The daily trading price of Omani crude in the Dubai Mercantile Exchange on Wednesday remained at $32.28, according to the Sultanate’s Ministry of Oil and Gas.
“There will be no more subsidies, however. They’ve been removed,” Tawfiq Al Lawati, a Majlis Al Shura member told the Times of Oman.
Asked about the reasons behind eliminating subsidies on oil products, he said there were arguments in favour of removing subsidies because, countries such as the UAE and Oman had a higher number of expatriates and visitors and therefore it did not make sense to continue with it.
“You have no choice...This is more like an indirect tax,” he added.