The Oman government has decided to raise the royalty paid by telecom companies to 12 per cent of their revenues from seven per cent, effective January 1, 2017.
The move is seen as part of government efforts to expand its revenue streams amid lower income from oil.
The Muscat Securities Market (MSM) temporarily suspended trading on the shares of Omantel and Ooredoo on Thursday morning as it awaited disclosures from both companies on the decision regarding the revised fee and its financial impact. Both companies filed their disclosures late on Thursday afternoon.
“TRA has formally informed us about the decision of the Council of Ministers to revert the royalty percentage to its previous rate of 12 per cent effective from January 1,2017. The current royalty rate is seven per cent,” both Omantel and Ooredoo confirmed in their disclosures filed to the MSM.
Omantel, in its disclosure, said that if the same increase [12 per cent royalty rate] had been applied for the first nine months of 2016, the effect on its net profit would have been a reduction of RO16mn for the period. Omantel had paid a royalty of RO25.4mn for the first nine months of 2016, according to the company's financial statement.
Ooredoo said if the same increase in royalty had been applied for the first nine months of 2016, the effect on the company's net income would have been a reduction of RO8.7mn, or 23.3 per cent. Ooredoo had paid a royalty amount of RO13.9mn for the first nine months of 2016, according to its financial statement.
Source: http://www.muscatdaily.com/Archive/Business/Oman-govt-hikes-telcos-royalty-from-7-to-12-4wpy