In its 2017 budget issued on 1 January 2017, the Omani government projected total spending of 11.7 billion Omani rial (OMR) (about 30.3 billion US dollars (USD)). Revenues were estimated at OMR8.7 billion (USD22.5 billion), leaving an anticipated deficit of around OMR3 billion (USD7.8 billion), which is 12 percent of GDP and 43 percent lower than the actual deficit of OMR5.3 billion (USD13.7 billion) for 2016 (based on initial final accounts). GDP is budgeted to grow by 2 percent.
This year’s budget is based on an oil price of USD45 per barrel, which is lower than the USD55 per barrel assumed in the ninth 5-year plan (FYP9) and suggests prudent financial management.
Highlights of the budget are as follows:
The government remains focused on ensuring that its economic diversification (“Tanfeedh”) and privatization programs succeed. A public-private partnership law will soon be enacted.
For more details about Oman’s 2017 budget, read the report from KPMG in Oman.
The following changes to Oman’s income tax law6 have been made:
The amendments are expected to enhance tax revenue collection, but may be expected to increase the cost of doing business in Oman. For instance, taxes on dividends and interest will reduce the return on investments, and could increase the cost of borrowing.
For more details about the changes to Oman’s income tax law, read the report from KPMG in Oman.
6 Royal Decree 9/2017 issued on 19 February 2017 and published in the Official Gazette on 26 February 2017.