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Oman's State Council Rejects Remittance Tax

by Lorys Charalambous, Lowtax.net, Cyprus
02 January, 2014

Oman's State Council has dismissed a proposal to impose a tax on the remittances sent by foreign workers to their home countries.

In November the Middle Eastern country's Shura Council suggested that the government tax remittances at the rate of two percent as a way of easing growing pressure on the state budget.

However, members of the State Council concluded after a meeting that the time is not right to consider such a tax, with one member saying it would "create a bad image of the country."

The State Council has not ruled out implementing a remittance tax in the future, but further research is needed. "As Oman is strategically located, and considering the good relations that we have with other countries, whatever major decision we make will definitely have an impact. It is always good to conduct proper research before taking action," Salim al Ghattami, member of the State Council and head of its economic committee said.

Oman has about 1.5m expatriate workers, most of whom come from south and southeast Asia. Based on the OMR3.1bn (USD8bn) which expatriates sent abroad as remittances in 2012, the proposed tax would generate about OMR62m in annual tax revenue.

The proposal was discussed during the State Council meeting on the budget for 2014. The members also discussed a proposal to tax natural gas.

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