Oman Set to Introduce Personal Income Tax by 2028


The Sultanate of Oman is moving forward with plans to implement a personal income tax by the year 2028, marking a significant policy shift in the Gulf region’s fiscal landscape. This initiative is part of the country's broader economic diversification strategy, aiming to reduce dependency on oil revenues and ensure long-term fiscal sustainability.
Part of Vision 2040 Economic Reform Plan
The new tax is aligned with Oman Vision 2040, a comprehensive national development agenda that prioritizes economic diversification, private sector growth, and financial resilience. The government’s Medium-Term Fiscal Plan (MTFP) outlines the personal income tax measure as a key fiscal reform intended to expand the non-oil revenue base.
Who Will Be Affected?
According to the latest government announcements, the tax will apply only to high-income individuals, with exact income thresholds and rates yet to be finalized. Middle- and lower-income earners are expected to remain exempt, in line with the government’s efforts to avoid placing additional burdens on ordinary citizens.
The Ministry of Finance has clarified that the tax will be carefully structured to minimize inflationary pressures and preserve consumer purchasing power. A progressive tax structure is likely, ensuring those with higher incomes contribute proportionately more.
Timeline and Implementation
Initially discussed in 2020 during Oman’s response to the COVID-19 economic crisis, the personal income tax was delayed due to administrative and political considerations. However, recent updates from the Ministry of Economy and Oman’s Fiscal Balance Plan indicate that preparations are actively underway, with an implementation target set for the year 2028.
Before enforcement, a comprehensive legal framework and tax administration infrastructure will be developed. Public awareness campaigns and stakeholder consultations are also expected to precede the rollout to ensure transparency and clarity.
Regional Context
Oman will be the first Gulf Cooperation Council (GCC) country to implement a broad-based personal income tax. Currently, GCC nations generally do not impose income tax on individuals, relying instead on corporate taxes, value-added tax (VAT), and customs duties.
This move signals Oman’s willingness to take bold steps toward fiscal reform, potentially setting a precedent for neighboring countries also facing similar economic pressures due to fluctuating oil prices and increasing public expenditure needs.
Fiscal Sustainability and Economic Outlook
The introduction of personal income tax is seen as a critical component of Oman’s strategy to achieve a balanced budget and reduce public debt, which has significantly improved since the launch of the Fiscal Balance Plan. Oman’s public debt-to-GDP ratio dropped from over 80% in 2020 to under 40% in 2024, reflecting strong fiscal discipline.
By expanding its revenue base, Oman is positioning itself for a more stable and diversified economic future. This shift reduces reliance on oil, enhances fiscal sustainability, and aligns the nation with global financial standards—laying the groundwork for long-term economic resilience and growth under the framework of Vision 2040.