The Effect Of Value Added Tax On Low Income People In Oman

Abstract

The main objective of this study is to clarify the impact of value-added tax (VAT) on the attitudes of low-income people in Oman by assessing their awareness of tax, changing their purchasing power, and changing their lifestyles. The study adopted a theoretical framework that consists of three variables: attitude, value-added tax, and purchasing power and lifestyle. The main question revolves around: what is the impact of VAT on the attitudes of low-income people in Oman? To answer the question, the study used a combination of both qualitative and quantitative methods; a survey was distributed to a sample of respondents, in which 200 questionnaires were returned, and several interviews has carried out in the Governorate of A’Sharqiyah.

The results showed that the introduction of VAT did not necessarily lead to more inequality or an increase in welfare equality for low-income groups. The purpose of government policy should improve the well-being of the least well-off rather than drive them deeper into poverty. An important recommendation is that governments should design their tax and transfer systems in such a way that the incomes of the poor are no lower than before fiscal intervention.