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Oman is set to implement a personal income tax for high-income individuals starting in 2028, as per Royal Decree No 56/2025, reported by the state-operated Oman News Agency (ONA).
This new legislation consists of 76 articles spread across 16 chapters and will enforce a 5% tax on taxable income for those whose gross annual earnings surpass OMR42,000, from specific types of income detailed in the law.
The Tax Authority has indicated that this measure is intended to bolster the country’s fiscal stability by broadening revenue streams beyond oil, in alignment with Oman Vision 2040.
Boosting non-oil revenue through personal income tax
The objective is to raise non-oil revenue to 15% of GDP by 2030 and to 18% by 2040. Additionally, this law aims to contribute to wealth redistribution, social protection measures, and overall social equity, according to ONA.
The authority stressed that this tax is the result of a thorough economic and social impact analysis, utilizing income data from various governmental sources.
This study established a high exemption threshold, indicating that nearly 99% of the Omani populace will be exempt from this new tax.
The 5% tax will apply exclusively to individuals earning above the OMR42,000 threshold and will include allowances and exemptions that reflect social considerations in Oman.
These aspects encompass allowances for education, health care, inheritance, zakat, charitable contributions, and costs associated with primary residences.
Implementation preparations underway
Karima Mubarak Al Saadi, director of the Personal Income Tax Project, announced that all essential arrangements for the tax’s application have been finalized.
Regulations will be issued within a year following the law’s announcement in the Official Gazette.
Al Saadi further mentioned that a new electronic tax framework has been developed to promote voluntary compliance and ensure precise income evaluations. This system will connect with relevant government agencies for verification.
The tax authority has also enhanced its workforce capabilities through targeted training initiatives and will provide guidance materials for both individuals and businesses in accordance with a planned rollout schedule.