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MONDAY, November 24, 2014 / 1 Safar 1436 AH
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Remittance tax on expats back in focus Taxing expats and cutting defence expenditure are among the proposed steps to meet the deficit due to drop in oil prices
REJIMON K reji@timesofoman.com MUSCAT: A tax on the billions of rials expatriates send home every year would add OMR60 million to Oman’s coffers, say Majlis Al Shura members who have called for a 2 per cent levy on remittances. Yesterday, the Majlis Al Shura approved an advisory committee’s proposal to help the Sultanate overcome a budget deficit due to drop in oil prices. There has already been mixed reaction to the move which would hit 1.9 million expats, with some fearing it would drive an increase in black market money transfers. The economic and financial committee of the Shura Council, a consultative body, recommended imposing a tax of 2 per cent on the remittances while discussing the draft budget. “The approval to tax expatriate remittances is one of the several steps proposed to overcome the budget deficit, which the Sultanate will face while adjusting the oil
price,” Tawfiq Al Lawati, a Shura member who took part in the meeting, told Times of Oman. Remittances from the expatriate community in Oman stood at OMR3.502 billion in 2013, compared to OMR3.109 in 2012; an increase of 12.6 per cent. According to the Shura committee around OMR60 million could be earned by taxing expat remittances per year. “The budget is based on oil price set on $85. The global average is $75. So, we have proposed to revise it to $80. While revising it, the budget will face a deficit of OMR500 million to OMR700 million. So, to overcome the deficit we have proposed several measures, including taxing the remittances,” the Shura member added. In a report issued by Central Bank of Oman in July this year, the remittances over the past five years were OMR13,621 billion, including OMR2.04b in 2009, OMR2.193b, in 2010, OMR2.774b in 2011, OMR 3.109b in 2012 and OMR3.502b in 2013. The report attributes the rise to the increase in the number of
expatriate workers in the private sector, some 1,527,000 workers in 2013 compared to 1,316,000 in 2012. Apart from remittances by migrant workers, who are mostly working in the private sector, the report also takes into account outflows from expats employed in the public sector. Commenting on the tax proposal, the CEO of Oman UAE Exchange said that it might encourage illegal money transfer. “If it is a government decision, we have to follow it. But our concern is that this may encourage illegal money transfer,” Tonny George Alexander, CEO of Oman UAE Exchange, said. “Every country has right to mobilise income for its development. We cannot say no to their plans. As majority of the expat workers belong to the low-income group, they should be exempted from tax,” Umesh Kumar, Chairman of the Institute of Chartered Accountants of India Muscat Chapter, said. Other than the move to impose tax on remittances to overcome the budget deficit, the Shura has suggested cutting the defence budget by 5 per cent, spending on certain government projects, rationalisation of the oil expenditure in line with production and also revision of the royalty fee on minerals trade. “The royalty fee was reduced from 10 per cent to 5 per cent three years ago. We have proposed to make it again 10 per cent,” the Shura member added.
TOP THREE INSIDE STORIES
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No cancellation of traffic fines
Wife to lose resident status if out of Oman
Omanis set to get e-visas in India
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For easing visa processing and help increase tourist inflow, India is all set to launch e-visa facility from November 27 for 40 countries, including Oman. >A4
On its Twitter account, Royal Oman Police (ROP) has scotched the rumours about traffic fines being cancelled on the occasion of 44th National Day. >A2
Since your wife is out of Oman and if she exceeds her stay beyond 180 days, she will lose her resident status and will not be able to re-enter the country. >A3
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4.5-MAGNITUDE
Earthquake hits Khasab Municipality considers ban on quad bikes
Times News Service MUSCAT: A 4.5-magnitude earthquake struck 68km off Khasab coast in the governorate of Musandam in the Strait of Hormuz on Tuesday evening, the Seismological Centre at Sultan Qaboos University said, adding that the epicentre was 26.47N and 56.59E with a depth of 10 kilometres.
A4 GULF CUP
Fans disappointed at Oman loss FAHAD AL GHADANI
fahadnews@timesofoman.com MUSCAT: Expectations of Omani fans had soared sky-high after their team thrashed Kuwait 5-0 in the quarterfinal encounter in Riyadh, but the soccer aficionados were left fuming at the team’s disappointing 3-1 loss to Qatar on Sunday in the Gulf Cup semifinal. They were raising questions on the tactics used by national coach Paul Le Guen against Qatar. Thanks to the hype created after the victory over Kuwait, life in Muscat virtually came to a standstill before the kick-off on Sunday evening with supporters glued to their TV sets at home and on the big screens at hotels in the city. But what disheartened the Omani supporters more was the way the team gave in after taking a 1-0 lead in the 24th minute of the match.
“I am more disappointed with the way we lost the game,” said Ali Al Nabi. “They did not show any desire to win the match. There was no urgency. They did not play as they did against Kuwait and that is very disappointing,” he said. Complacency Some fans attributed Oman’s failure to the complacency of the entire team. “The players got carried away by the attention they got after the victory over Kuwait. All those involved with the game — fans, players and everybody went overboard with the celebrations,” said one fan. “I felt as if we have won our second Gulf Cup. That was the kind of hype created after the Kuwait match,” another supporter said sarcastically. Some supporters questioned the strategy of coach Paul Le Guen and
some went to the extent of asking for his scalp. Substitute “Any coach will field his best in an important match like a semifinal. But we have a coach who preferred not start with a player who scored a hat-trick in the previous match,” said another fan, Omar Nasir, referring to substitute Said Salim Al Ruzaiqi, who scored thrice in Oman’s 5-0 win over Kuwait. “We were supposed to play the same way we played the last match with the same players. But unfortunately that was not the case. Said Salim was sent in with just 30 minutes left and by that time all was over for us,” he added. He summed up the mood of fans saying: “The entire team and their performance was really disappointing. We are all sad.” See also >C1
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DECISION
HM issues four Royal Decrees SCAN THIS QR CODE TO INSTANTLY VISIT
ARTICLE W W W.T I M E S O F O M A N .C O M
Remittances 2009-2013
3.5
In billion OMR
3.1 3
2
2.8 2.2
2.0
12.6%
12.1%
26.5%
7.5%
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0 Source: Central Bank of Oman
Graphics
MUSCAT: His Majesty Sultan Qaboos bin Said has issued four Royal Decrees as follows: Royal Decree No. 62/2014 promulgates a law fixing fees for the hydrocarbon materials and petroleum products shipping port. Article (1) stipulates that the provisions of the attached “Law on Fixing Fees for the Hydrocarbon Materials and Petroleum Products’ Shipping Port” shall be enforced. Article (2) cancels all that contravenes or contradicts the provisions of this Decree. Article (3) states that the Decree shall be published in the gazette and that it shall be enforced with effect from the day following its date of issue. Issued on November 23, 2014. Royal Decree No. 63/2014 endorses the organisational structure of the Directorate General of the Supreme Council for Planning. Article (1) approves the organisational structure of the Secretariat General of the Supreme Council for Planning in accordance with the procedure stated in the annex attached to the Decree. Article (2) cancels all that contravenes or contradicts the provisions of this Decree. Article (3) states that this decree shall be published in the gazette and that it shall take effect on its date of issue. Issued on November 23, 2014. >A6