The continued slide in oil price has placed all exporters under pressure, particularly those which need hydrocarbon revenues to balance their budgets. With small production volumes and relatively expensive to extract oil, Oman is struggling to close a budget deficit forecast to be 13% of GDP in 2016. As one of the measures to minimise the economic impact of lower revenues on the local population, Oman will raise the corporate tax rate. If approved by the cabinet, the rate levied on LNG producers will rise from 15% to 55% - the same rate as that applied to production sharing contracts. This puts the Omani corporate tax rate for LNG producers in line with other countries in the Middle East. In recent years Oman has been perceived as a fiscally stable regime. However, it is the first country in the Middle East to raise taxes in response to the low oil price.
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Insight | Jan 2016
Oman votes to raise LNG corporate tax rate
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