DUBAI: Oman expects its non-oil revenues to increase by 25 percent this year, rising from 2.4 billion Omani rials ($6.24 billion) in 2020 to about 3.2 billion rials.
Speaking on the Asharq channel on Monday, Khalid bin Saif Al-Busaidi, media and communications director at Oman’s Ministry of Finance, said the sultanate would implement a 5 percent value-added tax in April which would generate around 300 million rials.
This would lead to an increase in non-oil revenues, which would be reflected in reducing the budget deficit and lowering dependence on oil, he added.
According to a Finance Ministry budget statement, the expected deficit for the current year was 2.24 billion rials, down from 4.2 billion rials in 2020.
Al-Busaidi said this year’s ministry-estimated borrowing plan of around 1.6 billion rials represented 73 percent of the total predicted deficit and included domestic and international borrowing.
He pointed out that Oman was working to pay the debts within deadlines without rescheduling and that a new debt repayment provision would set a financial reserve to pay future debts.
The ministry has started the transfer of 150 million rials for the current year, and will double it for next year, reaching up to 600 million rials by 2025, and seeking to pay all the sultanate’s dues. Al-Busaidi noted that the 2021 budget was in line with the Omani 2040 Vision that aimed to raise spending efficiency and maintain the deficit in a downward direction, until a surplus was achieved by 2025.
On government expenditure to stimulate the economy, he said that while the ministries of finance and economy shared the same goals of reducing the deficit through spending cuts and increased non-oil revenues, they were still committed to boosting economic activity and growth and creating job opportunities.
He added that this would help to revitalize the economy, increase market movement, and generate employment opportunities, especially in small- and medium-sized enterprises (SMEs).
The initiatives form part of a set of packages implemented last year to tackle the impact of the coronavirus disease (COVID-19) pandemic on the Omani economy by increasing activity and supporting the private sector by targeting SMEs to create various industries and services for future development.