[oman-l] Oman Cuts 1999 Spending and Raises Taxes

[Joachim Duester]

Oman Cuts 1999 Spending and Raises Taxes
http://www.arabia.com/content/business/1_99/oman3.1.shtml

Oman Cuts 1999 Spending and Raises Taxes

MUSCAT (Agencies, 3 January 1999) 
-- Oman has cut government spending by seven percent and 
plans to raise taxes in its 1999 budget in a bid to increase
state revenue in the face of low oil prices, Finance Minister Ahmad 
bin Abdel Makki said Saturday.

State spending will be cut to 2.16 billion riyals ($5.6 billion) as
government revenues drop by an expected 24 percent to 1.53 billion
riyals ($3.96 billion) over the same period, Makki told reporters.

The 1999 budget deficit has been forecast at double that of 1998, 
with a total of 631 million riyals ($1.6 billion), and the state may have 
to dip into its reserves to make up the shortfall, the minister said.
The budget is based on an oil price of nine dollars a barrel of 
Omani crude. "No improvement is expected in oil prices and, therefore, 
prices will remain at their low level at least during the next two years," 
he said.

But the minister added that health, education, and social security
spending would not be affected by the budget cuts.

Tax on luxury goods will be raised from five to 15 percent, corporate
income tax will jump from 7.5 percent to 12 percent, and customs
duties on cars will be raised from five percent to between 10 and 15
percent.

The sultanate has cut oil output twice this year in a bid to raise prices,
slashing a total of 50,000 barrels per day (bpd) to reduce current
production to between 850,000 and 860,000 bpd.

Brent North Sea crude prices for February delivery on London's
International Petroleum Exchange (IPE) rose to about $10.47 a barrel
earlier in the week from $10.12 at the close of trade on December 24.