Oman to be first Gulf country to impose personal income tax

 

1.  Oman will become the first country in the Gulf to impose a personal income tax, as the oil producer works to diversify its revenue stream.

2.  The new law, issued by Royal Decree No. 56/2025 by Sultan Haitham bin Tarik, will apply a 5% tax rate on individuals earning over OMR 42,000 annually.. The tax would apply to about 1 percent of the population.

3.  Comprising 76 articles across 16 chapters, the law also includes deductions and exemptions that take into account the social situation in the Sultanate of Oman, such as education, health care, inheritance, zakat, donations, primary housing.

4.  An electronic system has been designed to enhance voluntary compliance and is linked with relevant institutions to ensure accurate calculation of individuals’ income and to verify the accuracy of submitted tax returns.

5.  The move supports the objectives of Oman Vision 2040, which targets reducing dependence on oil by achieving 15 percent of gross domestic product from non-oil sources by 2030 and 18 percent by 2040.