Oman to Introduce First Personal Income Tax in Gulf
- Publish date: Tuesday، 24 June 2025 Reading time: two min read
Oman is making history in the Gulf region by becoming the first country to introduce a personal income tax, starting in 2028. The move is part of the sultanate’s broader push to diversify its economy under Oman Vision 2040 and reduce its reliance on oil revenue.
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Announced through a royal decree on Sunday, the new Personal Income Tax Law sets a 5% tax on annual incomes exceeding 42,000 Omani rials ($109,236), according to Oman News Agency. This carefully crafted threshold means 99% of Oman's population won't be affected, only high-income individuals and expats will see an impact.
Officials say the law aligns with Oman’s social and economic realities. It includes a range of deductions and exemptions for essential expenses like education, healthcare, primary housing, zakat, donations, and even inheritance, ensuring minimal disruption to middle-class citizens.
A Milestone in Economic Maturity
“This shows Oman has reached a more mature economic stage,” said David Daly from Gulf Tax Accounting Group. He noted that the competitive 5% rate will keep Oman attractive for global professionals, especially compared to high-tax countries.
The law has been in the making since 2022. Authorities conducted a thorough analysis using income data from multiple government entities to strike a balance between fiscal goals and social impact. The outcome: a tax policy that’s low, focused, and fair.
Designed to Protect the Middle Class
Aurifer Middle East Tax Consultancy described the law as a “precedent” and noted that with such a high exemption threshold, the tax mainly affects “senior professionals, business executives, and wealthy expatriates.”
They added, “This avoids harming consumer confidence and ensures steady economic growth while supporting budget stability.”
Support for Long-Term Growth
Oman’s economy is growing steadily, with non-oil sectors like tourism, agriculture, manufacturing, and services showing promise. The IMF projects a GDP growth of 2.4% in 2025 and 3.7% in 2026, thanks to a stronger non-hydrocarbon performance.
The goal of the new tax isn’t just revenue, it’s long-term fiscal resilience. It will help broaden Oman’s revenue base, attract international investors, and improve the country's credit outlook.
What’s Next?
Karima Al Saadi, who leads the tax project at Oman’s Tax Authority, confirmed that all systems are ready. The electronic platform for tax filing is already in place and connected with relevant departments to ensure accurate reporting and compliance.
Guidance manuals and executive regulations will be rolled out within a year, helping both citizens and expats understand their responsibilities clearly.
