Oman income tax: 5% levy on high earners from 2028; 99% population to remain unaffected
Oman announced the introduction of personal income tax, targeting high-income individuals, as part of a broader fiscal reform initiative under its Vision 2040 strategy.
The new tax, first in the history of Oman, will take effect from January 1, 2028, and impose a 5 per cent levy on individuals earning more than OMR 42,000 per year.
The measure was formally issued under Royal Decree No. 56/2025 by Sultan Haitham bin Tarik and marks a significant step towards economic diversification.
Karima Mubarak Al Saadi, director of the personal income tax project, said that infrastructure, training, and legal frameworks are already in place, reported ANI. She added that awareness and educational guides for individuals and businesses will be rolled out in stages ahead of the law's implementation.
All you need to know about Oman's new income tax
The new law includes 76 articles across 16 chapters, clearly defining taxable income categories. It also outlines social exemptions for essential expenses such as education, housing, healthcare, zakat, and donations, ensuring fairness and shielding low- and middle-income earners from additional financial burden.
According to the nation's tax authority, the exemption threshold has been deliberately kept high to ensure that about 99 per cent of Oman's population remains unaffected by the tax.
The primary objective of the new personal income tax is to increase the contribution of non-oil revenues to Oman's GDP, which the government aims to raise to 18 per cent by 2040.
To facilitate implementation, Oman is building a modern electronic tax system that will link government databases for accurate income reporting and improved compliance. The executive regulations for the new law will be issued within a year of its publication in the Official Gazette.
Other goals include improving fiscal stability, supporting public welfare programs, and enhancing the country's credit ratings.
In 2024, Oman collected OMR 1.4 billion in corporate, VAT, and selective taxes. The addition of personal income tax is expected to strengthen the nation's fiscal position and enhance its appeal to global investors.
This move also reflects a broader regional shift in the Gulf, where countries are seeking to build more sustainable and resilient economies by reducing dependence on oil income.
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