Middle East - Oman: 3% surcharge to be levied on premiums
Source: Middle East Insurance Review | Feb 2016
Insurance is set to cost more in Oman as the Majlis Al Shura or Consultative Assembly has decided to impose a 3% surcharge, in addition to the existing 1.6% government tax, on insurance premiums as the Omani government moves to counter the impact of oil price declines on its fiscal position.
According to a Shura source, life insurance and reinsurance schemes will be exempted from the new surcharge, reported the Times of Oman.
“The Shura has voted and approved the introduction of a 3% surcharge on insurance premiums. It’s a move to generate extra revenue. We have to look into all kinds of solutions as the oil price dip is making it tough for us,” said the Shura source. Out of the 39 members present at a voting session, 22 voted ‘Yes’ and 17 voted ‘No’. The proposal will be now forwarded to the State Council.
Meanwhile, a top official from an insurance firm said the surcharge would be passed on to the customer. “At present, the 1.6% tax is paid by the customer. Now, we will have to also pass on the 3% surcharge to them,” the official said.
Oman’s government revenues have fallen by more than 60% since June 2014, when it used to sell oil at $115 per barrel.
OMR1 = US$2.60