Definition
Excise tax is a selective consumption tax levied on specific goods deemed harmful to health or the environment, or considered luxury items. Unlike VAT, which applies broadly to most goods and services, excise tax targets a narrow range of products at higher rates to discourage consumption and raise revenue. In Oman, excise tax was introduced in June 2019 as part of the GCC-wide excise tax framework agreed under the GCC Unified Excise Tax Agreement.
Context in Oman
Oman excise tax applies to tobacco products (100 percent), energy drinks (100 percent), carbonated drinks (50 percent), alcohol (100 percent), and pork products (100 percent). The tax is levied at the point of import or first domestic sale and is calculated on the retail selling price or a deemed value set by the tax authority. Businesses that import, produce, or hold excise goods must register with the Oman Tax Authority and file periodic returns. Compliance is monitored through a digital stamp and track-and-trace system for tobacco products. Revenue from excise tax contributes to the government fiscal diversification strategy, complementing VAT and corporate income tax.
Key Data Points
| Metric | Value |
|---|---|
| Excise tax introduction | June 2019 |
| Tobacco tax rate | 100 % |
| Energy drink tax rate | 100 % |
| Carbonated drink tax rate | 50 % |
| Administering authority | Oman Tax Authority |
Vision 2040 Connection
Excise tax supports Vision 2040 on two fronts: it contributes to fiscal sustainability by generating non-oil revenue, and it advances public health objectives by discouraging consumption of harmful products. The strategy may consider extending excise coverage to additional product categories as part of ongoing fiscal reform.
Further Reading
- [[What is VAT in Oman]]
- [[Oman Tax System Overview]]
- [[Oman Customs Duties]]