Oman to impose new excise tax this month to boost revenues

Oman has been slow in implementing fiscal reforms aimed at limiting the widening of its budget deficit. (File/AFP)
Updated 09 June 2019

Oman to impose new excise tax this month to boost revenues

  • A 100% excise tax will be introduced for tobacco products, energy drinks, among others
  • A 50% tax will be applied on carbonated drinks

DUBAI: Oman will impose a new tax on sugary drinks and tobacco products starting on June 15, as the small Gulf oil producer seeks to boost state revenues strained by years of low oil prices.
A 100% excise tax will be introduced for tobacco products, energy drinks, alcohol and pork meat, while a 50% tax will be applied on carbonated drinks, according to a statement from an official at the Secretariat General for Taxation published by Oman’s state news agency on Saturday.
“The excise tax is a consumption tax and is considered to be indirect taxes. Thus, the final charge is on the consumers, but it is collected in advance at a stage of the supply chain, notably through the business sectors,” said Sulaiman bin Salim Al-A’adi, director general of survey and tax agreements.
Oman has been slow in implementing fiscal reforms aimed at limiting the widening of its budget deficit, while it has increasingly relied on external funding – through bonds and loans – to refill its coffers.
The sultanate had originally planned to introduce a 5% value-added tax in 2018, which is now expected to start in 2020.
“Further delays in implementation, along with a scenario of lower oil prices, pose downside risks to our assumption of narrower fiscal deficits relative to 2015-2017,” S&P Global Ratings said in April, adding that it expected fiscal gains in 2019 coming from the implementation of excise taxes on tobacco and energy drinks.
Oman said at the start of the year it expected its budget deficit to be 2.8 billion rials ($7.27 billion) this year, or 9% of gross domestic product.
Sources told Reuters last month that to cover part of the deficit, Oman is expected to issue a new international bond soon in a deal likely to go up to $2 billion in size.


A Jordan startup delivers eco-friendly alternative to dry cleaning

Updated 05 December 2019

A Jordan startup delivers eco-friendly alternative to dry cleaning

  • Products used by WashyWash are non-carcinogenic and environmentally neutral
  • Amman-based laundry service aims to relocate to a larger facility in mid-2020

AMMAN: A persistent sinus problem prompted a Jordanian entrepreneur to launch an eco-friendly dry-cleaning service that could help end the widespread use of a dangerous chemical.

“Dry cleaning” is somewhat of a misnomer because it is not really dry. It is true that no water is involved in the process, but the main cleaning agent is perchloroethylene (PERC), a chemical that experts consider likely to cause cancer, as well as brain and nervous system damage.

Kamel Almani, 33, knew little of these dangers when he began suffering from sinus irritation while working as regional sales director at Eon Aligner, a medical equipment startup he co-founded.

The problem would disappear when he went on vacation, so he assumed it was stress related.

However, when Mazen Darwish, a chemical engineer, revealed he wanted to start an eco-laundry and warned about toxic chemicals used in conventional dry cleaning, Almani had an epiphany.

“He began to tell me how PERC affects the respiratory system, and I suddenly realized that it was the suits I wore for work — and which I would get dry cleaned — that were the cause of my sinus problems,” said Almani, co-founder of Amman-based WashyWash.

“That was the eureka moment. We immediately wanted to launch the business.”

WashyWash began operations in early 2018 with five staff, including the three co-founders: Almani, Darwish and Kayed Qunibi. The business now has 19 employees and became cash flow-positive in July this year.

“We’re very happy to achieve that in under two years,” Almani said.

The service uses EcoClean products that are certified as toxin-free, are biodegradable and cause no air, water or soil pollution.

Customers place orders through an app built in-house by the company’s technology team.

WashyWash collects customers’ dirty clothes, and cleans, irons and returns them. Services range from the standard wash-and-fold to specialized dry cleaning for garments and cleaning of carpets, curtains, duvets and leather goods.

“For wet cleaning, we use environmentally friendly detergents that are biodegradable, so the wastewater doesn’t contain any toxic chemicals,” Almani said.

For dry cleaning, WashyWash uses a modified hydrocarbon manufactured by Germany’s Seitz, whose product is non-carcinogenic and environmentally neutral.

A specialized company collects the waste and disposes of it safely.

The company has big ambitions, planning to expand its domestic operations and go international. Its Amman site can process about 1,000 items daily, but WashyWash will relocate to larger premises in mid-2020, which should treble its capacity.

“We’ve built a front-end app, a back-end system and a driver app along with a full facility management system. We plan to franchise that and have received interest from many countries,” Almani said.

“People visiting Amman used our service, loved it, and wanted an opportunity to launch in their countries.”

WashyWash has received financial backing from angel investors and is targeting major European cities initially.

“An eco-friendly, on-demand dry-cleaning app isn’t available worldwide, so good markets might be London, Paris or Frankfurt,” Almani said.

 

• The Middle East Exchange is one of the Mohammed bin Rashid Al-Maktoum Global Initiatives that was launched to reflect the vision of the UAE prime minister and ruler of Dubai in the field of humanitarian
and global development, to explore the possibility of changing the status of the Arab region. The initiative offers the press a series of articles on issues affecting Arab societies.