Taxes

[Arabian Princess]

In Oman we do not pay income taxes like most countries on the world.
Do u think the time has come to pay those taxes? do you think it is economicly feasabile to do so?
What alternatives to those taxes you think we can implement.

[Don Khaled]

people in oman cry without taxes, so how do you expect to have taxes?? Forget the idea of taxes in Oman.

[Wanderer]

You are proposing taxes, yet don't mention what projects/programs for which the added revenue is intended.

Revolutions are born of this stuff.

[mimosa]

Hmmmm.....the Muscat Ice Tea Party?!

Princess,

Personal tax is a big leap. It is inevitable I think that people have to pay for what they use in public facilties in one way or another. But at the moment, the national resources in state ownership can provide.

A first step should be the introduction of proper corporate taxes in line with the rest of the World. Zakat is a good basis for taxation, and contains most of the provisions for e.g. tax deductable expenses and reinvestment, as a contemporary secular system. The difference is in the amounts. Zakat requires a great deal of honesty, and is based purely on a current account balance. Accounts are more complicated these days, and profits are bigger. Get the businesses paying their dues first. As there are virtually no businesses investing in Oman, this will not affect the economy - all the major private businesses are straightforward importers of foreign goods and contribute nothing from their wealth. Corporation tax is the way to start I think (and it should be the same for all companies, Omani or foreign, big or small).

[Wanderer]

Ugh,

talking about how to introduce/implement taxes without ever defining why you need taxes nor what you'd do with the revenue is backwards.

The very first question is what do you want, then you get into how you'd finance it. NOT, oh England has taxes, so we must need them too.

[mimosa]

Wanderer......you're grumpy lately, wassup?:confused:

Sorry, I missed that bit: The answr in Oman' case is a 20% budget deficit, GDP growth rate 1%, population growth rate 3.5%. There are savings which could be made, but every Omani knows that more resources are needed for basic public services.

[Wanderer]

Originally posted by mimosa
Wanderer......you're grumpy lately, wassup?:confused:


Sorry, perhaps it's the whole US steel tarrifs and farm subsidies (esp. dairy) that have my shorts in a bunch. I hate handouts, corporate welfare, and the whole tax first then decide how to engineer society with financed programs later mentality. So I prefer to hear a problem and related facts stated first, then discuss possible solutions, etc.


Originally posted by mimosa

The answr in Oman' case is a 20% budget deficit, GDP growth rate 1%, population growth rate 3.5%. There are savings which could be made, but every Omani knows that more resources are needed for basic public services.

So the problem is:

How to finance Oman's public services in the future, considering that it is currently financed through deficit spending (at 120% of available funds), with GDP growth at 1% and population growth at 3.5% ?

Additional information: Oman does not currently levy a personal income tax.

Proposed solution (by Arabian Princess) : levy taxes

What are some other options?

Can Oman increase current revenue sources - oil exports, natural goods exports, tourism ?

What other options exist - i.e. lease military bases, corporate taxes, personal taxes, tolls, port fees, VAT, etc. ?

[mimosa]

W, you're right of course. The other things you mention (apart from leasing military bases - politics sabla?!), are already in action....I think AP's question is, if that's not enough, where next? Taxes have got to be on the list somewhere.

For me, they would have to come after a more liberalised economy and labour market, and privatisation of all state industries to raise short term investment capital and long term productivity.

[Arabian Princess]

Wow, intresting argument both mimosa and wanderer. It is nice to hear from people who did experience paying taxes.

Just a correction, am not asking for taxes to be levyed. Am just thinking will they be an option? do we need them now or soon or we can live without them??

Well come good receomendation came here, I dont agree on personal taxes because no matter what when a person works he would prefer to have and keep all the earnings for himself.

Wanderer, we do not have any kind of income taxes in Oman. I agree that diversifying the economy would help the country live on less deficit finance.
a more educated labor force would increase the revenue for the country (does it :lost: ).
I really have no much to add from both you have written but I wanna one thing, when you pay taxes some of your income come out does that mean that goods and services would be cheaper??? (since income reduces = less income for spending? )

sorry if the question seemed stupied, but the issue of taxation always confuses me and its not an area which am good at.

[Wanderer]

Originally posted by Arabian Princess
...I dont agree on personal taxes because no matter what when a person works he would prefer to have and keep all the earnings for himself.

Why Princess, you may be a Libertarian :) I'm not much of an economist, but ...

By what right does the State take one's hard earned money - the common good ? Then why not take it all and give back just what you need and use the rest for those who have earned less? Well because it takes away the incentive for you to take risks and/or work harder to earn more. It is hard for me to imagine putting in longer days at the manufacturing plant to earn more if I don't get to keep it. Why go to school 4 to 8 more years studying to get a PhD when you'd end up with the same net wages as the person who assembles bicycles? Where is the Soviet Union now?

Corporate taxes have their drawbacks too. What if I want to make my own company. I save and save and then invest in some product to add value to and resell, I hire and train and plan, hoping I will be successful, but my profits are then taxed away. Why would anyone bother - there is risk in trying to start your own business and it's mostly the potential rewards that make that risk worth taking.

What would constitute a fair use of taxes? I'd say what ever was necessary to create an environment which would foster and protect a vibrant economy: national security, law enforcement, transportation systems (airports, roads, shipping facilities), subsidies to start Utilities ( water, electricity, garbage management) - though not to keep them running.


Originally posted by Arabian Princess

Wanderer, we do not have any kind of income taxes in Oman. ...when you pay taxes some of your income come out does that mean that goods and services would be cheaper??? (since income reduces = less income for spending? )


Try to keep it that way.

Taxation reducing costs ? - I believe only indirectly. The real driving force behind lower prices is competition. Are more luxury cars sold in China or Oman (per capita or aggregate)? Do you think those cars are cheaper in China ? I don't think so, though cheaper models may be available.

The main thing is that none of this stands alone. Just taxing the rich, or corporations, etc., may well have unintended consequences - make it too expensive to do business in Oman and guess what? Companies stop selling there. Over-tax the rich ? - they can afford to move, and then only poor people remain.

The key is a combination of an educated population, with incentive to take economic risks, and the infrastructure of utilities to support business.

Tourist-based economies do well to have a sales tax :) Let the visitors contribute the most. But don't over do it or they may find better value elsewhere.

[Arabian Princess]

old topic, but still intresting!!

[6Sigma]

who are you going to tax? average GDP is in the range of $8000 with 1% growth in it and 2.5 million people. Is it worth really to axaust people with income tax to get some few millions!!

[Nimr Mal Zibala]

TAX EM I SAY
who the hell is paying for free education and health and university? An additional 1 rial from every worker is enuf to fund something or at least maintain something. And tax the **** foreigners who get paid 5000rials and above. Everything is free and omanies think that government will solve all their problems, help yourselves and cough up. On the other hand the budget structure for education and health is not that great here and thats why we have too many morons and people using government hospitals when they have a cold, soar throat and other illnesses which can be cured with hot tea and lemon. it sucks sucks sucks sucks

[Faisal]

Everyone is taxed these days, but maybe not everyone is well informed about.However its not a personal income tax in contest as much as its a personal development pay.

Check how much your original salary is, and how much is deducted.Mainly there is a deduction for social insurance, retirement, and there is a plan to deduct money for vocational training purposes (if not already applied on companies).

Currently there is a tax on hotel income, property rents, leisure and cinema income and electricity bills exceeding certain amount per month.There is also custom duty 5%-25%(This is before Oman joined WTO, since I've been away before it joins, I don't know what's applied now).There is also a custom duty for alcohol (100%) :-) , and its as high as 50% for tobacco and I think there is a plan to increase the tobacco taxes.To boost Omanisation , there is an annual tax of 90 rials on each foreign employee.

mimosa suggested a corporate taxation system, which already exist for 20 years now.Its from 0 - 7.5% for Omanis buisnness and varies according to the percentage of Omani participation in the In joint ventures (reaches 50% sometimes).
However, this is all deducted from employees salaries, a company would make salaries less when taxes are applied on it, which indirectly affects the employees.

Taxes are of an advantage in the long run (as Wanderer advised above) but the country can't apply more taxes because of the already existing burden of relatively low salaries, and due to the oil resources and as we all know, oil resources are owned by every Omani , not only the government, so the government has taken the personal income tax away instead. Before H.M's government and the discovery of Oil, the main source of Income was TAXES.There was a personal custom duty tax, for anything you bring in or take out of the country, there was also an annual tax received from Zanzibar until 1960 , and personal taxes were also received from Guwadar (correct me if I am mistaken).

Zakat is not a tax, and shouldn't be mixed up with tax.A Tax is translated as `9ara2ib, and it wouldn't be given to anyone but the government, while the zakat is given to any poor, and is not obligatory or monitored by the government.

[Dark Project]

Yes,

Tax them All as one of the members expressed.
My question here these tax money where is it utilized ? Is it considered as National inome as per my understanding in Oman the system is a centralized one .Every penny come in including tax's go to Ministry of Finance to control .