Royal Decree promulgates Personal Income Tax Law

Muscat: His Majesty Sultan Haitham bin Tarik today issued Royal Decree No. (56/2025) promulgating the Personal Income Tax Law, after the same was presented before the Council of Oman.
Article (1) states that the 'Personal Income Tax Law', attached to this decree, shall be enforced.
Article (2) stipulates that the Chairman of the Tax Authority shall issue the Executive Regulation of the law attached to this decree within one year of the date of publication of the same in the Official Gazette. The Chairman of the Tax Authority shall also issue the decisions necessary for the implementation of the Law's provisions.
Article (3) cancels the clause (1) of the article (18-bis) of the Income Tax Law issued by Royal Decree No. (28/2009). It also cancels all that contradicts the attached law or contravenes its provisions.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Observer

5 minutes ago

• Observer

Income tax to diversify economy, shore up social protection

Oman is on the cusp of a significant shift in its tax landscape with the introduction of a personal income tax (PIT). This move, a first for the Gulf Cooperation Council (GCC) region, aims to diversify the country's revenue streams and reduce its reliance on oil revenues. The introduction of personal income tax in Oman is a strategic move to diversify revenue streams and address economic challenges. While it may present some challenges, it also reflects Oman's commitment to aligning its tax regime with global standards and fostering economic growth. The Personal Income Tax Law, as per Royal Decree No 56/2025, consisting of 76 articles distributed across 16 chapters, stipulates a 5 per cent tax on the taxable income of natural persons whose gross annual income exceeds RO 42,000, derived from specific income types as defined by the law. The law also includes deductions and exemptions accounting for social considerations in the Sultanate of Oman, such as education, healthcare, inheritance, zakat, donations, primary housing and other factors. The Tax Authority said that the Personal Income Tax Law complements the tax system in line with Oman's economic and social conditions and aligns with the role assigned to the Tax Authority. It also contributes to the objectives of 'Oman Vision 2040' by diversifying income sources and reducing reliance on oil revenues, with targets of 15 per cent of GDP by 2030 and 18 per cent by 2040. Additionally, the tax aims to promote wealth redistribution among societal segments, enhancing social justice, while supporting the state budget and specifically financing part of the social protection system. The implementation follows an in-depth study assessing its economic and social impact, with approximately 99 per cent of Oman's population expected to be exempt. The executive regulations of the law will be issued within a year of its publication in the Official Gazette. An electronic system has been developed to promote voluntary compliance, linked with relevant departments for accurate income calculation and verification. The initial plans for an income tax were announced in 2020. The draft proposals suggested a tax rate ranging from 5 per cent to 9 per cent for Omani citizens and expatriates. However, the implementation date has been repeatedly postponed. With all necessary preparations and requirements for implementing the tax completed, the executive regulations of the law will be issued within one year of its publication in the Official Gazette. An electronic system has been developed by the Tax Authority to promote voluntary compliance and has been linked with the departments concerned to ensure accurate income calculation and verification of tax declarations. The Tax Authority has also strengthened its workforce through specialised training programmes in line with the tax implementation requirements. Additionally, guidance manuals for natural and legal persons will be published according to a predetermined schedule. Oman's move to introduce a personal income tax sets it apart from other GCC countries, which currently do not have a personal income tax. While Oman is introducing a personal income tax, it already has a corporate tax framework in place. The standard income tax rate for businesses is 15 per cent. However, small and medium enterprises (SMEs) meeting specific criteria can benefit from a reduced tax rate of 3 per cent. Special provisions apply to the petroleum sector, with a tax rate of 55 per cent.

Times of Oman

2 hours ago

• Times of Oman

Personal Income Tax: A key step for revenue diversification, sustainable growth

Muscat: The Ministry of Economy affirmed that the implementation of the Personal Income Tax (PIT), set to take effect at the beginning of 2028, represents a crucial step toward enhancing financial stability and completing the fiscal sustainability framework. This measure aims to ensure sustainable financing for development across various sectors. Dr. Said Mohammed Al Saqri, Minister of Economy, stated: 'The tax serves as a new revenue stream to diversify public income sources and mitigate risks associated with reliance on oil as the primary revenue source. It will help maintain current levels of social and service spending while preserving Oman's achievements in financial and economic stability under 'Oman Vision 2040' and its first executive phase, the Tenth Five-Year Plan (2021-2025)." He explained that the (PIT) is a fiscal tool adopted by most countries worldwide as a key revenue source to fund state-provided services. Over 190 countries impose this tax, and in many, income taxes constitute the largest component of total tax revenues at federal and local levels, financing public goods and services. He noted that implementing the tax in Oman will yield significant economic benefits, supporting income diversification strategies and long-term fiscal stability as a pillar of economic growth. It, he added, will also sustain government revenues, strengthen the state's financial position, maintain credit ratings, and boost spending power for beneficiaries—directly stimulating aggregate demand and economic growth. He highlighted that oil and gas revenues account for 68% to 85% of Oman's total public income, depending on global energy prices. While oil prices have stabilised at favorable levels in recent years, they remain volatile. Oman has effectively managed additional oil revenues by reducing public debt to safe GDP ratios, increasing investment and social spending, and subsidizing essential goods and services, he further noted. He affirmed that government policies and initiatives have successfully shifted Oman's fiscal and economic trajectory toward sustainability and stability. Public debt has sharply declined, credit ratings have consistently improved to investment-grade levels, and Oman's standing in global competitiveness indices has risen. The Tenth Five-Year Plan sustained GDP growth near target rates, while economic diversification policies attracted quality investments and drove non-oil sector growth beyond expectations, the minister said. He added: 'As the Tenth Plan nears completion, Oman has advanced significantly in economic diversification and fiscal sustainability. The (PIT) will further prioritise financial stability by diversifying revenue sources—a strategic necessity to ensure equitable wealth distribution, enhance public services, strengthen social protection systems, and mitigate risks from global energy market fluctuations and other economic variables.' He emphasised that accelerating "Oman Vision 2040" and its economic diversification strategy—transitioning to a knowledge- and technology-driven economy—requires sustainable funding for long-term planning. The Vision targets strategic investments in education, human capital, advanced infrastructure, innovation, and diversified sectors, alongside essential services and social protection. He pointed out that the 2025 budget allocates over OMR5 billion (39% to education, 24% to health, 28% to social protection) to these sectors, with the Social Protection Fund benefiting over 2 million people monthly as a key mechanism for household financial stability. As for the potential economic impacts, He noted that the tax study assessed effects on GDP and 18 economic sectors, concluding minimal impact (under 1%) due to high exemption and low tax rates. Foreign investment is expected to remain unaffected, as the tax applies to individuals—not corporate entities—and Oman's rates remain competitive globally, the minister concluded.

Times of Oman

2 hours ago

• Times of Oman

UTAS-Al Mussanah Honours Graduates and On-the-Job Training Partners

Under the patronage of Dr. Munia Mohammed Al-Farsi, Deputy Assistant Vice-Chancellor for E-Systems and Student Services, the Training and Career Guidance Center at the University of Technology and Applied Sciences – Al Mussanah, represented by the Graduate Follow-up and On-the-Job Training Sections, hosted the Second Graduates Gathering and Recognition Ceremony for Partner Institutions involved in the On-the-Job Training Program for the 2024/2025 academic year. The event took place on Thursday, June 19, 2025, at the university campus in Al Mussanah. During the ceremony, 20 institutions from the public and private sectors were honored for their contributions to the success of the OJT program and for providing students with real-world training opportunities. Special recognition was given to the Royal Navy of Oman, which accommodated over 100 student trainees across the 2023/2024 and 2024/2025 academic years, making it one of the program's most active partners. The event also featured the Second Graduates Gathering, dedicated this year to university graduates currently employed at the Al Mussanah branch. The gathering fostered a warm and engaging environment filled with entertainment, and graduates -led activities that encouraged connection among attendees. In her remarks, Dr. Munia Al-Farsi praised the efforts of the partner institutions and emphasized the importance of strengthening ties with the labor market to enhance student capabilities and better align their professional readiness with the goals of Oman Vision 2040. The ceremony concluded with the presentation of commemorative plaques and certificates of appreciation to the honored institutions, reaffirming the university's commitment to deepening partnerships and evolving its training and employment programs in line with national aspirations.