Personal income tax comes into effect in Oman from January 1, 2028
The new Personal Income Tax Law contributes to the objectives of Oman Vision 2040 by diversifying income sources and reducing reliance on oil revenues. The targets set are 15 per cent of GDP by 2030 and 18 per cent by 2040.
The law, issued by Royal Decree No 56/2025 (consisting of 76 articles across 16 chapters), will apply a 5 per cent tax rate on individuals earning over OMR42,000 (USD109,230/AED401,160) annually. It also includes deductions and exemptions for social considerations in Oman, such as education, healthcare, inheritance, zakat, donations, primary housing, and other factors.
The Authority added that the new tax system follows an in-depth study assessing its economic and social impact, based on income data from various government entities. It led to the establishment of a carefully considered exemption threshold, which ensures that approximately 99 per cent of Oman's population will not be subject to this tax.
Karima Mubarak Al Saadi, Director of the Personal Income Tax Project, confirmed that all necessary preparations and requirements for implementing the tax have been completed.
Speaking to Oman News Agency (ONA), Al Saadi said that 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 programs in line with the tax implementation requirements.
The Authority said the new 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.
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