Oman Introduces Personal Income Tax: A Shift Towards Economic Diversification

Oman announced its plan to introduce personal income tax on top earners by 2028, diversifying its hydrocarbon-dependent economy. The tax targets those making over USD 109,000 annually and is part of broader economic reforms under Vision 2040, aiming for financial stability amid oil market fluctuations.

Oman has announced plans to implement personal income tax, signaling a strategic shift to diversify its economy beyond oil dependence. This move is outlined by the official Oman News Agency, marking a first among the Gulf Cooperation Council (GCC) nations, traditionally reliant on hydrocarbon resources.

Beginning in 2028, the proposed 5% tax will impact only the top 1% of earners, specifically those with annual incomes over USD 109,000. This initiative, introduced via royal decree, aligns with international forecasts urging Gulf countries to innovate in revenue generation due to fluctuating energy markets.

The transition is part of Oman's broader Vision 2040, aiming to nurture a technology-driven economy. The Economy Minister, Said bin Mohammed Al-Saqri, emphasized that personal income tax will enhance financial stability by diversifying revenue streams beyond oil and gas, which currently constitute up to 85% of public income.

(With inputs from agencies.)