Oman - Politics, government, and taxation



Oman has been ruled by the Royal Al Bu Sa'id family since the 18th century. Political parties are not allowed in the country and there are no directly elected representatives. The current sultan, Qaboos Bin Sa'id Al Sa'id, overthrew his father in a palace coup in 1970 and seized the throne. Although the family has traditionally ruled over all state affairs, the new sultan has been careful to balance tribal, ethnic, and regional interests and as a result he has placed several tribal leaders in the government. In 1991 the sultan established the 59-seat Consultative Council, or Majlis Ash-Shura, to act as a consultative body, thus allowing a limited form of political expression. The government selects council members from lists of nominees proposed by each of the 59 wilayats (regions). Nevertheless, the country is an absolute hereditary monarchy and the sultan still rules by royal decree. He can appoint and fire all council ministers as well as ministers in the defense department, the department of foreign affairs, and the department of finance.

Oman did not have a constitution until 1996, when the sultan promulgated (proclaimed) the "Basic Law" by decree. This basic law clarifies the royal succession, provides for a prime minister, bars ministers from holding interests in companies doing business with the government, establishes a bicameral legislature, and guarantees basic civil liberties for Omani citizens. The legislature has no power to overturn the sultan's wishes. Its role has been purposefully ill-defined so as to render it a fairly ineffective body. The state promises to provide health care and education for all citizens as well as maintain security through the use of the army. Basic freedoms such as freedom of the press are touched upon, however, they are not clearly defined and are still very restricted. The Omani legal system is based both on English common law and Islamic law. The ultimate authority in law remains the sultan and he has not yet accepted compulsory jurisdiction of the International Court of Justice (this institution has its seat in The Hague and is the principal judicial organ of the United Nations).

The major source of government revenue does not come from taxation but from oil revenues. The only direct taxes in Oman are income tax (which ranges from 15 to 45 percent) and some regional taxes; the only indirect tax is customs duty . There are 5 percent taxes on hotel and restaurant bills, a 2 percent tax on electricity bills exceeding OR50. Oman makes no distinction between resident and non-resident companies. If a company has income from Oman that requires occasional visits to the Sultanate, the income will be considered taxable. Tax rates on non-petroleum, foreign-owned firms were lowered in October 1996 for all except those firms with greater than 90 percent foreign ownership. The nature of the relationship between the petroleum companies and the government will often govern taxation and royalties on petroleum producers. Labor law and the Oman tax law also affects a foreigner's ability to do business in Oman. There is no complete body of regulations codifying these laws and many government decisions are made on an ad hoc basis.

Also read article about Oman from Wikipedia

User Contributions:

Comment about this article, ask questions, or add new information about this topic: