In a bid to reduce its reliance on crude oil revenues, the sultanate of Oman has announced a slew of new taxes on products ranging from tobacco and alcohol to port and energy drinks, Bloomberg reports, citing Oman’s Secretariat General of Taxation.
Beginning June 15th, pork meat, tobacco, and alcohol as well as energy drinks will be subject to a 100-percent tax, with carbonated drinks subject to a 50-percent levy. Last November, a senior Oman government official said the taxes could generate around US$260 million in annual revenues.
Oman is not a member of OPEC but it is not a minor producer: the average daily rate for April was more than 970,000 barrels of crude and condensate. Its exports go to Asia, with China soaking in almost 84 percent of the total and the rest divided between India and Japan.
Yet like other Persian Gulf producers, the sultanate has suffered its fair share of the 2014 price crisis fallout. Also like others, it has been reluctant to introduce any measures that would be unpopular among the locals, but has in the end found it necessary to risk it. This year, analysts surveyed by Bloomberg say, its current account deficit could swell to 9.1 percent, hence the countermeasures.
Additional taxation, however, is not the only measure Oman is looking to diversify its economy away from oil. It is also pursuing renewable energy projects: the two most recent ones both solar and, interestingly, both to be utilized in the oil industry, Oxford Business Group reported last month.
Despite the oil price-related troubles that no one in the Middle East seems immune to, Oman is doing fairly well. A recent report by the World Bank said Oman will book the highest economic growth among members of the Gulf Cooperation Council in 2020, at 6 percent, not least thanks to its diversification efforts but also because of the expansion of its oil and gas production.
By Irina Slav for Oilprice.com
