Oman Levies Tax on Foreign Workers

The economic and financial committee of the Shura Council, an advisory committee to the government of Oman, has proposed that the country should tax the billions of dollars sent out of the country by foreign workers, by two percent. Many countries in the region with a great deal of migrant workers have been looking at ways to account for the loss of this money in the economy, when workers send back a large portion of their paycheck to family members back home.

While worries of a negative effect have arisen, the deputy head of the committee, Ali bin Abdullah al-Badi has assured that the tax rate is appropriate so it will not have negative effects on the economy. At the moment no taxes are levied against money transfers.
Oman has a population of about 3.9 million people and of those, 1.5 million are migrant workers, most from southeast Asia and are the focus of the new proposed tax.
Of course the government says this tax isn’t going to solve all of its fiscal issues, but it would help to drive opportunities in diversifying income, which at the moment is mainly relying on oil and is steadily declining.

This tax would make foreign workers more expensive to hire, so the alternative effect it could have would be to create more jobs and hire more Omani citizens, which at the moment, many are suffering from unemployment.
In 2012, transfers accounted up to 3.1 billion rials ($8.1 billion) according to a report by the central bank. This would mean the proposed tax could bring in around 62 million rials a year.

Other countries such as Saudi Arabia have deported almost a million foreigners since last March in order to allow for more room for Saudi citizens to get into the job market and prevent money from flowing out of the country. The UAE also has been talking about leveling a similar tax, but does not have the same problem of being overly dependent on foreign workers, since the business model is based off of foreign investment and driving international trade.

But Oman, like most Gulf oil exporting states, is in a tricky situation as its oil resources decline and has to wane off its dependency on foreign workers. And with social unrest following 2011, the government had to boost state spending to keep order, which has had a strain on the state. Next year Oman is projected to spend around 13.5 billion rials; that’s up from the 12.9 billion that was planned for 2013. And that’s not including the approximately 900 million rials the government may have to pay to raise wages, effectively standardizing salaries after a royal order to do so in the public sector.

Other recommendations have also been made by the committee, including raising the royalty rate on natural resources and reevaluating fees collected by the government.
At the moment Oman is projecting a budget deficit of 1.8 billion rials, six percent of their GDP. However, as long as the price per barrel of oil doesn’t drop below $100, which is sits at $108 now, Oman should have a surplus in 2014. Yet, counting on oil is a slippery slope, as the Gulf state must look to other industries to help keep the economy on track.
Think you might be affected by this new tax as an expat? Talk with an adviser at Globaleye today to see how you can plan and prepare.

Start 2014 Anew: Saving Tips from Globaleye

The New Year means fresh starts, and a chance to create a new you; financially, personally, career wise, and more. So here are some tips from Gobaleye on different areas that can help you gain more success in 2014.

Exercise

If you don’t have your health, then it doesn’t matter what else you may have. Starting to get into a regular exercising routine will not only have immense benefits for your body, but your mind will be sharper and in just a week of sticking to a routine, you’ll already notice a difference and have more energy.

While going to the gym is the typical place to workout, it’s a common misconception that it’s the only place you can. Investing in a fitness ball, a pull-up bar and a few dumbbells can open up a lot of opportunities for exercising at home when you’re not able to make it to the gym. Also, keep in mind that you can still get the same benefits from body weight training (not using weights) – squats in a wide stance, side bends, holding push-ups, jumping-jacks, and other activities that combine strength with cardio. The key is to remember the higher the intensity, with fewer breaks, the more reward and improvement you’ll see.

Career shift

If you’re tired of your current job and looking for a refreshing change, you have to clean up your CV as it’s the first thing your potential employers are going to see and your ticket to getting an interview. The most basic point is to cut to the chase; employers generally have a lot of applicants and little time, so don’t waste your time with long run-on sentences or points that aren’t relevant – make sure your strongest qualities and experience are covered right of the bat and if they want to know more, they’ll ask. You’ll also want to highlight what makes you unique and separates you from all the other applicants, so think carefully what strengths you have that will be an asset to an employer.

And if you’ve been sending out the same version of your CV, you’re doing it wrong. You should be adjusting it to the needs and wants of each employer, because while two companies may be in the same industry, their mission and goals could be completely separate.

Also, spelling or grammatical errors are a definite deal breaker, so have someone else look it over before you submit it; a fresh pair of eyes is always a good idea to give you feedback and notice if anything is off.

Earning and saving more

There’s a reason a large portion of the wealthiest individuals are entrepreneurs – they utilize all of their strengths and find ways to develop basic things into profitable businesses. So maybe you have a hobby that could be earning you some extra cash by turning it into a home business, perhaps it’s knitting clothes or photography that you could try to sell online, either way there are plenty of ways to make the most of your activities.

Or maybe you’ve been working at the same place for a while and are about to get a raise. Instead of taking that extra cash and having some fun, the smart way to save is to stick to the budget you were operating off of before the raise, and stash the extra bit away, as if you didn’t even have it. Save it; invest it; just don’t spend it and it’ll make up for those dipping pensions. And if you’re not sure how or what to invest in, talk with a financial advisor at Globaleye to see how you can make the most of your money.

Remember, it takes some determination to stick to it, but if you do, by the time 2015 rolls around you’ll look back and see just how far you’ve come.