Muscat Municipality battles tax evasion by landlords

Muscat - 

Muscat Municipality has said that some landlords are evading taxes by not registering their contracts with tenants, leading to losses in thousands of rials every year.

“This tax evasion is affecting our ability to shore up revenues necessary for expenditure on public services,” the Muscat Municipality said.

The municipality said that all contracts/leases have to be registered with it along with an administrative fee of five per cent of the annual rental value of the property.

Muscat Municipality has said that some owners of residential buildings do not register the lease pacts. “The forms of evasion include a pact between the landlord and the tenant for a much lower value than actual or not signing a lease at all. This affects the rights of both the parties.

“Some landlords do not even sign agreements in connivance with tenants while others undervalue the property to evade tax. It deprives the municipal coffers of thousands of rials every year.”

Muscat Municipality has said that a contract allows property owners to claim late payment and get the house vacated in the event of non-payment of rent.

“A registered contract helps in solving rent disputes and address rent hike issues. It protects the tenant from an unjustified eviction for six months.”

Meanwhile, Muscat Municipality has signed an agreement with the Oman Investment and Finance Company (OIFC) to tackle the problem of tax evasion. OIFC will collect information about property owners and tenants in the agreed areas who have not registered their contracts with the municipality.

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