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Oman will introduce a personal income tax on high earners starting in 2028, following the issuance of Royal Decree No 56/2025, according to the state-run Oman News Agency (ONA).
The new law comprises 76 articles across 16 chapters and will impose a 5 per cent tax on taxable income for individuals whose gross annual income exceeds OMR42,000, derived from specific income types outlined in the legislation.
The Tax Authority stated that the law aims to enhance the country’s fiscal sustainability by diversifying revenue sources beyond hydrocarbons, in alignment with Oman Vision 2040.
Personal income tax to increase non-oil revenues
The target is to increase non-oil revenues to 15 per cent of GDP by 2030 and 18 per cent by 2040. Additionally, the law is intended to support wealth redistribution, social protection systems, and overall social justice, according to ONA.
The authority emphasised that the tax follows an extensive economic and social impact study, based on income data from various government entities.
This assessment ensured the establishment of a high exemption threshold, with the findings indicating that approximately 99 per cent of the Omani population will not be subject to the new tax.
The 5 per cent levy will apply only to individuals earning above the OMR42,000 threshold and includes provisions for deductions and exemptions to reflect social priorities in Oman.
These considerations include allowances for education, healthcare, inheritance, zakat, charitable donations, and expenses related to primary housing.
Preparations in place
Karima Mubarak Al Saadi, director of the Personal Income Tax Project, said that all necessary preparations for the tax’s implementation have been completed.
Executive regulations will be issued within a year of the law’s publication in the Official Gazette.
Al Saadi added that a new electronic tax system has been developed to facilitate voluntary compliance and ensure accurate income assessments. It will be integrated with relevant government departments for verification purposes.
The tax authority has also expanded its human resources capacity through specialized training programmes and will release guidance manuals for both individuals and legal entities in line with a scheduled rollout plan.
