Oman’s Sultan has approved a revised personal income tax law, making key amendments and lowering the threshold level.
Workers earning more than OR42,000 ($110,000) annually will be subject to income tax of 5 percent, according to Oman News Agency (ONA).
Sultan Haitham bin Tarik issued a Royal Decree on Monday stating that the law will start from January 2028.
The move comes at a time of rising geopolitical tensions in the region as a result of the Israel-Iran conflict.
The Sultan did not approve a proposed draft by the State Council and Majlis Al Shura in January this year that gave different income tax thresholds for Omanis and expatriates.
That proposal said that foreign nationals earning over $130,000 would be subject to a 5 percent to 9 percent tax, while Omani citizens would be taxed 5 percent on income exceeding $1 million.
“The income tax will contribute to the objectives of Oman Vision 2040 by diversifying income sources and reducing reliance on oil revenues,” Karima Al Saadi, director of the Personal Income Tax Project, was quoted as saying by the ONA.
Oman is set to become the first Gulf country to introduce personal income tax, a shift from the region’s longstanding no-income-tax policy, which has been key to attracting expatriates and driving economic growth.
Saudi Arabia and the UAE have introduced corporate taxes, while Qatar has hinted at potential tax reforms.
Oman is under pressure from the International Monetary Fund to reduce its reliance on oil and gas, which account for 72 percent of its revenue.
The country already imposes corporate income tax, VAT and excise tax. Oman raised around $3.6 billion from taxes in 2024, which include corporate and VAT.
