Tax will be on most goods and services, though with some exceptions. There will be exemptions for sectors that will include financial services, basic food commodities, healthcare, education, home rentals and the supply of crude oil, petroleum products and natural gas. The implementation of the Value Added Tax is to ensure the Sultanate’s financial sustainability, enhance its competitiveness, and reaffirm its commitment to international and regional agreements and improve the business environment.
All six GCC states agreed to introduce 5% VAT in 2018 after a slump in oil prices hit their revenues. Saudi Arabia, the UAE and Bahrain have already introduced the tax, with Riyadh tripling it this year. Oman, Kuwait and Qatar have not yet introduced the tax.