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MONDAY, January 5, 2015 / 14 Rabi Al Awal 1436 AH
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REAL ESTATE WILL WITHSTAND OIL PRICE FLUCTUATIONS Real estate sector in Oman is secure and may not be affected by the fall in oil prices, reaffirmed Engineer Mohammed bin Salim Al Busaidi, chairman of Oman Real Estate Association, in an interview to Al Shabiba. -Photo: Times of Oman See also >A5
MUSCAT: His Majesty Sultan Qaboos bin Said has received a cable of greetings from Lt General Hassan bin Mohsin Al Shuraiqi, inspector general of police and customs, on the Royal Oman Police (ROP) Day which falls on January 5 every year. In his cable, Lt General Al Shuraqi expressed his greetings along with the wishes of ROP personnel to His Majesty the Sultan, praying to Allah the Almighty to grant His Majesty the Sultan good health and happiness and the Omani people further progress and prosperity. He said the ROP personnel while celebrating this blessed occasion renew their allegiance and loyalty to Your Majesty with the pledge to safeguard the integrity of the country. —ONA
REJIMON K
reji@timesofoman.com MUSCAT: There is little chance of passing on to the customers the burden of service tax imposed by India on non-resident Indians’ remittances, an official from a money exchange house in Oman said. “We don’t feel that money exchange houses will pass on the tax burden to the customers. They will find a solution,” Philip Koshy, general manager of Modern Exchange in Oman, said. Last October, the Indian government had brought money transfer from abroad also under the service tax net. Recently, there were reports that when the Indian government rolls out the
Tax fraudsters robbing Oman by not paying Tax Revenues Financial experts have urged the government to plug
From companies operating in Oman (OMR)
281,952
353,283
394,464
the loopholes so that tax evaders cannot get away by
2011
2012
2013
bifurcating activities
Companies registered with the government
Paying taxes
120,000
4,000
and preparing fake balance-sheets
Graphics
REJIMON K FAHAD AL GADHANI
reji@timesofoman.com fahadnews@timesofoman.com MUSCAT: Companies trying to evade paying the tax they owe Oman artificially divide their business activities and prepare false balance-sheets, experts said on Sunday, calling on the government to do more to make those abusing the legal loopholes cough up the cash. “We have seen that some of the companies have been preparing untrue annual balance-sheets and bifurcating their activities to avoid tax payments, which will eventually cause a huge loss to
NRIs will not feel the remittance tax heat
the government revenues,” Jose Chacko, a financial analyst, said. “The government should implement stricter measures to find the tax evaders. It should adopt steps which will ensure that untrue balance-sheets are not prepared and submitted,” the financial analyst added. In Oman, a flat 12 per cent rate applies to all businesses, including branches and permanent establishments of foreign companies, with taxable income exceeding OMR30,000. According to government
data, OMR394,464.4 was the tax revenue from the companies operating in Oman in 2013. It was OMR353,283.3 in 2012 and OMR281,952.2 in 2011. In 2013, if the total revenue for oil and non-oil products was OMR14,216.9 million, the expenditure was OMR13,949.5 million. Last week, while approving the state budget for 2015, the State Council decided to bring more companies within the ambit of the tax net to balance the budget in the face of falling oil revenues. Tawfiq Al Lawati, a Majlis Al Shura member, told the Times of Oman that the government must exert more pressure on companies not paying the income tax. “Even though there are almost 120,000 companies registered with the government, only about 4,000 companies actually pay the income tax,” Al Lawati said, adding that 4,000 companies come under the big firms list. He also said that the government must combat hidden trade which is affecting the budget. Meanwhile, a company official said that companies should not run away from paying tax to the government. “Companies cannot just take profit from the business and run away from paying tax to the government, which is crucial for the country’s economy. How can a country move ahead if it falls short in its tax revenues?,” asked Abdul Gafoor, a top official of Al Shabibi Global LLC, said. >A6 TOP THREE INSIDE STORIES
OMAN
‘Labour camps must have medicare’
1
A doctor and a well equipped clinic should be made available in workers’ accommodations. >A2
OMAN
Close the car loan before exiting Oman
2
It is advisable for you to either close the car loan or transfer the loan to a third party before exiting Oman. >A3
MARKET Pristine Qantab woos tourists
A6
Muscat bourse lacking luster
3
MSM, which declined by 7.2% last year, emerged as the second worst performing bourse in GCC. >B1
reformed goods and services tax (GST) by April 1 next year, the tax rates will be increased to 27.54 per cent from the current 12.36 per cent, up by 120 per cent, and the burden will be passed on to the customers. “Currently, the service tax is paid on fee or commission paid by exchange houses to the Indiabased banks if they have a tie-up for money transfer. Only a few exchange houses have such tieups, and only they will fall in the tax net. Currently, the exchange houses are bearing the cost,” Philip said. “If the service tax becomes 27.54 per cent, the exchange houses will not be able to bear it. But we feel that it will not be passed on to the customers,” Philip added. >A6
S TAT E - O W N E D F I R M S
Government plans sale of stake to meet OMR2.5 billion deficit A. E. JAMES
businesseditor@timesofoman.com MUSCAT: Oman government is set to divest its stake in several state-owned firms in a move to cover an unprecedented budget deficit of OMR2.5 billion in 2015. The semi-government or stateowned companies that have been identified for privatisation include Majan Glass, National Aluminium Products Company, and Muscat Electricity Distribution Company. The government will divest
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its stakes in these companies either by an initial public offering or selling ownership to strategic partners or a combination of both. The planned privatisation programme of a number of stateowned firms is under preparation and would be carried out in the
next three years (2015-17), after getting necessary approvals, said the Ministry of Finance in a statement. Apart from borrowing from within the country and outside, disinvestment will generate additional revenue to cover the deficit at a time when the oil prices have touched a five-year low of $56 per barrel. In fact, there was no urgency for the government to raise funds for meeting expenditure last year in view of high oil prices until the third quarter of 2014, which resulted in a surplus. >A6