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Oman has a big problem at present; a considerable budget deficit which seems to be growing progressively larger.
Like any other well-run government, policy-makers in Oman have begun to look for solutions to reduce this unfortunate set of circumstances, especially as oil revenues continue to underperform.
One strategy being used in Oman is changing how expat worker visas are being processed. In the past companies could simply apply for visa on behalf of overseas staff and receive these free-of-charge. Of course there are cost implications for issuing such documents, not to mention capital costs of maintaining the systems the visa system relies on, and the cost of staffing the visa offices.
As of January 1st 2016 the Omani Police (responsible for border control and immigration) have begun to implement a fee to any company requesting a visa for expat workers. As of this year the cost is a very reasonable fee of just OMR20 to process either new visas or renewals.
The fact that most Omani visas are just 2 years in length means that the government can expect considerable revenues to begin flowing into their accounts in the coming years as ever more employers are required to stump up for these new fees.
It is interesting to note that the new rules state that the cost of such a visa must be met by their employer, rather than being passed on to the individual. The Omani labour law states that “neither the employer nor the person licensed to provide foreign workers shall charge the worker any sum in consideration of his employment”.
On the one hand it is reassuring to note that expats themselves will not have to pay for their work visa. On the other hand, for employers of large numbers of expats the fees could quickly escalate, potentially making employing expats less tempting than local workers. Quite whether this will reduce the demand for overseas workers in the Sultanate remains to be seen.
The predicted income that this new policy will generate are considerable. Oman is estimated to have almost 1.8 million expats in the country at present, with most of those expats expected to end up requiring payment to renew their visas as they expire.
The total predicted income from this exercise is likely to be in the magnitude of OMR33 million by the end of next year. This translate to roughly 34 million US dollars in additional revenue.
Many countries around the world – and especially in the Middle East – currently charge just as much if not more for their working visas. These fees therefore seem more than reasonable. Recent interviews by the Omani press suggest that most employers of expats therefore see these as entirely reasonable fees, though concerns have been raised as to whether these fees will increase considerably in time.
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