Oman to introduce 5% income tax on high earners from 2028
Muscat – Oman will implement a 5% income tax on individuals with annual earnings exceeding RO42,000 starting January 2028, marking a milestone in the sultanate's fiscal reform agenda and the first such measure in the GCC.
The new tax regime, outlined in a law comprising 76 articles across 16 chapters, aims to broaden revenue streams while ensuring that most citizens remain unaffected.
Karima bint Mubarak al Saadiya, Director of the Individual Income Tax Project at the Tax Authority, said that all preparations for the rollout have been completed. She confirmed that executive regulations will be issued within a year of the law's publication in the Official Gazette.
'Guidelines for individuals and legal entities are being prepared and will be released in line with an approved timeline,' she added.
According to the Tax Authority, only about 1% of the population is expected to fall within the taxable bracket, based on income data gathered from multiple government entities. The exemption threshold has been set deliberately to shield the majority of citizens from taxation.
The measure is part of Oman's wider plan to strengthen public finances and reduce reliance on oil revenue, aligning with broader economic diversification goals under Oman Vision 2040.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Times of Oman
an hour ago
- Times of Oman
World Bank report lauds Oman's strong economic performance
Muscat — The World Bank's 2024 Gulf Economic Update report highlighted that the Sultanate of Oman has achieved significant positive fiscal and economic results despite regional and global challenges. The report affirmed that Oman's economic performance reflects the success of its fiscal and economic policies amid global changes, aligning with the priorities of economic diversification and financial sustainability under "Oman Vision 2040." It noted that Oman has recorded fiscal surpluses in recent years due to government measures to improve financial performance, as well as a current account surplus driven by growth in non-oil exports and services exports, strengthening its external position. The report praised Oman's reduction of public debt from 68% to 35% of GDP, demonstrating its commitment to fiscal sustainability, along with its credit rating upgrade to an investment-grade level (BBB-) by S&P in 2024. Additionally, Oman maintained low inflation at 0.6% in 2024, compared to the GCC average of 2%. Looking ahead, the report projected continued current account surpluses and growth in non-oil exports, supported by fiscal discipline and economic diversification efforts. For the broader GCC, the report forecasted economic growth of 3.2% in 2025 and 4.5% in 2026, with the oil sector expected to grow by 5.7% and the non-oil sector by 4.9% in the medium term, while inflation remains low.
Observer
9 hours ago
- Observer
OJT partners, UTAS graduates feted
MUSSANAH: The University of Technology and Applied Sciences – Al Mussanah (UTAS-Al Mussanah), through its Training and Career Guidance Center, hosted the second graduates gathering and recognition ceremony on June 19. Held under the auspices of Dr Munia bint Mohammed al Farsiyah, Deputy Assistant Vice-Chancellor for E-Systems and Student Services, the event recognised key partner institutions involved in the On-the-Job Training (OJT) Programme for the 2024-2025 academic year. A total of 20 public and private sector institutions were honoured for their support in providing students with practical, real-world training experiences. Notably, the Royal Navy of Oman received special recognition for training over 100 students across the 2023-2024 and 2024-2025 academic years, establishing itself as one of the university's most active OJT partners. The gathering also brought together UTAS graduates currently employed at the Al Mussanah campus. The event provided a vibrant and engaging atmosphere, filled with graduate-led activities and entertainment that encouraged networking and connection among attendees. In her address, Dr Al Farsi lauded the contributions of the partner institutions and stressed the importance of strengthening ties with the labour market to enhance student preparedness and align with the objectives of Oman Vision 2040. The ceremony concluded with the presentation of commemorative plaques and certificates of appreciation, reaffirming the university's commitment to building impactful partnerships and advancing training initiatives in step with national development goals.
Observer
9 hours ago
- Observer
Editorial - 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.
