marking a significant shift in the country’s tax policy. This move comes after the lower house of Oman’s parliament, the Majlis Al Shura, approved a draft income tax law in July. The law, which is the first of its kind in the Gulf Cooperation Council (GCC) region, will now be sent to the state assembly for final approval.
Currently, neither Omani citizens nor expatriate residents are subject to personal income tax. However, under the new proposal, foreign nationals earning more than $100,000 (Dh367,000) annually will be taxed at a rate of 5 to 9 percent. Omani nationals will face a 5 percent tax on global income exceeding $1 million (Dh3.67 million).
This move follows a trend among Gulf states to diversify their revenue streams and reduce reliance on oil and gas. Many have already introduced various tax measures, including corporate taxes, value-added tax (VAT), and excise duties.
Oman’s government has also indicated it will prioritize improving corporate tax collection rather than increasing the VAT rate, which currently stands at 5 percent, or raising other government fees to boost non-hydrocarbon revenues.
