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It is for the first time that Oman has announced the introduction of personal income tax on high-income individuals effective January 2028.
According to a report by Gulf News, high earners in the country will have to pay a personal income tax of 5 per cent effective 1st January 2028, as the Sultanate advances fiscal reforms under Vision 2040. The move is a major step under the Vision 2040 plan, which aims to diversify the economy and reduce reliance on oil revenues. The main goals of the tax are to boost non-oil revenues, improve fiscal stability, and strengthen Oman's credit ratings. The government aims to raise the share of non-oil revenue to 18 per cent of the country's GDP by 2040. According to the Tax Authority, this high exemption limit means that about 99 per cent of Oman's population will not be affected by the tax. The revenue from the new tax will also support social protection programs, including welfare and public services.The new law, issued under Royal Decree No. 56/2025 by Sultan Haitham bin Tarik, will impose a 5 per cent tax on individuals earning more than OMR (Omani Rial) 42,000 per year. The income tax law is made up of 76 articles across 16 chapters and includes clear guidelines on which types of income will be taxed. It also provides social exemptions for essential expenses such as education, housing, healthcare, zakat, and donations, ensuring fairness and protecting low- and middle-income earners. To prepare for the rollout, Oman is developing a modern electronic tax system that will link government databases to ensure accurate income reporting and encourage voluntary compliance. The executive regulations for the new law will be issued within a year of its publication in the Official Gazette. Karima Mubarak Al Saadi, Director of the Personal Income Tax Project, noted, "Training, infrastructure, and legal frameworks are already in place. Educational guides for individuals and businesses will be rolled out in phases ahead of the law's implementation." In 2024, Oman collected OMR 1.4 billion from corporate, VAT, and selective taxes. The new personal income tax is expected to further strengthen Oman's financial position and make the country more attractive to international investors. This landmark move follows a broader trend in the Gulf region, where several countries are working to build more sustainable and diverse economies by reducing their dependence on oil income. (ANI)
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