As the bill approaches the final stages of legislative approval, it is expected to be implemented in 2025
Oman is poised to introduce personal income tax, becoming the first GCC country to do so, expectedly in the coming year following the advancement of the draft law by its Shura Council to the State Council. With legislative approvals nearing completion, implementation is likely by 2025, after the bill’s initial drafting in 2020.
Analysts anticipate that while other GCC nations may eventually adopt personal income tax, it is not expected to happen in the immediate future. Oman’s introduction of this tax could potentially serve as a model for other GCC countries, as reported by Khaleej Times last year. Haji Al Khouri, undersecretary of the UAE’s Ministry of Finance, stated that the UAE currently has no plans to implement personal income tax, despite encouragement from global financial institutions to diversify revenue sources away from oil. The UAE has recently introduced a 9% tax on corporate incomes to bolster revenues.
Emirates NBD Research noted that the new personal income tax in Oman will initially affect a minority, with foreign nationals earning over $100,000 in Oman subject to a 5% to 9% tax, while Omani citizens with global income exceeding $1 million will face a 5% tax rate. Out of Oman’s population of 5.2 million, which includes 2.2 million expatriates constituting 42.3%, most expatriates have educational qualifications below a general diploma level.
Emirates NBD Research further indicated that the introduction of personal income tax in Oman could lead to an expansion of the GCC’s tax base, aligning Oman with the UAE and Saudi Arabia, which have already implemented Value Added Tax (VAT).
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