Oman - Implementation of Tax Stamps on Excisable Drinks

28 November 2024 – The Oman Tax Authority (OTA), in partnership with De La Rau (DLR), recently organized an online workshop for the taxpayers introducing the third phase of the Tax Stamp program to the market stakeholders. Below are the key points discussed during the online workshop:

Key highlights

• Scope and Coverage: The Tax Stamp is currently imposed on cigarettes and other tobacco products only. In the third phase, its applicability is being extended to excisable drinks, including carbonated drinks, sweetened drinks, and energy drinks sold in Oman Mainland. However, Duty-Free sales and exports are not included within the scope of the Tax Stamps program.
• Applicability: The OTA is set to implement Tax Stamps on excisable drinks according to the following timelines:
  • Customs Enforcement: 31 January 2025 – The Tax Stamp must be applied and activated on all excisable products entering the Sultanate of Oman for sale in the local market.
  • Local Enforcement: 30 April 2025 – It will be prohibited to trade any products within the Sultanate, imported or produced in Oman, that do not carry the Tax Stamps. 
• Marking Methods: Two marking methods will be available to stakeholders:
  • Direct to Products (DTP): Used in manufacturing industries, including heavily regulated sectors, to mark individual products with unique serial numbers. It is formatted as a marker, printed by production line systems (i.e., manufacturing applications), and supports can/bottle carrier style.
  • Physical Markers:  Manufacturers and importers of excisable drinks can apply the Physical Markers within a secured allocated area. It is formatted as a "label" (15mm * 15mm), presented in reels (30K), supports manual application, and prevents reuse due to enhanced frangibility.

Key Notes Regarding the DTS and Physical Marker: 

• DTP Framework recommendations do not stipulate the location of the mark specifically; however, the marker must be readable by a smartphone application.
• A set fee is to be paid directly to DLR through the purchase agreement.
• Importers can appoint a third party to apply Physical Markers in designated areas.
• Use of serialized trackable markers or stamps.
• Tax Stamps are to be marked on every single unit, regardless of being sold as multiple units.

Recommendations for businesses

• Product Registration: Taxable persons should identify products falling under the scope of the third phase and ensure these products are registered in the Excise system on the OTA portal. This will also facilitate smooth customs clearance at the time of import.
• Training: Businesses and stakeholders must familiarize themselves with the developments and ensure their teams are equipped to comply with the changes in the excise tax regime.
• Registration with the GS1: Taxable persons should register with GS1, which provides a globally recognized system for product barcodes, enhancing inventory management, product tracking, and regulatory compliance.

How Deloitte can help

Deloitte offers extensive experience in excise tax-related services, including:

• Assistance with registration with relevant authorities
• Registering products in the Excise system
• Updating excise tax prices in the Excise system
• Assistance with Tax Stamp requirements
• Conducting excise 'health checks'
• Providing excise tax training
• Assistance in the classification of goods for excise tax purposes
• Obtaining clarifications from tax authorities
• Tax Warehouse licensing registrations
• Preparation of governance manuals
• Integrating excise tax into ERP systems through tax technology