The Impact of Value Added Tax (VAT) Implementation on the Performance and Sustainability of Small and Medium Enterprises (SMEs) in Oman

The implementation of Value Added Tax (VAT) in Oman has introduced significant changes in the financial and operational landscape of Small and Medium Enterprises (SMEs). This study examines the impact of VAT on the performance and sustainability of SMEs across various sectors in Oman. It explores how VAT compliance requirements, administrative costs, and cash flow adjustments affect business profitability, competitiveness, and long-term growth. Using both primary and secondary data, the research analyzes SMEs’ perceptions, financial performance indicators, and adaptive strategies post-VAT implementation. Findings indicate that while VAT initially imposed financial and administrative burdens, many SMEs have gradually adapted through improved accounting practices and fiscal discipline. The study concludes that effective government support, digital tax systems, and capacity-building initiatives are essential to enhance SME sustainability under the VAT regime.

Value Added Tax (VAT), Small and Medium Enterprises (SMEs), Oman, Fiscal Policy, Financial Performance, Business Sustainability, Tax Compliance, Economic Diversification

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