(Emirates Policy Center) The Sultanate of Oman is set to become the first Gulf country to introduce a personal income tax law, effective in 2028. Omani officials say this tax will affect only about 1% of the population and will exclude expenditures on housing, healthcare and education. Introducing the personal income tax aligns with the broader goals of Oman Vision 2040, which seeks to diversify the country’s revenue streams and reduce its reliance on oil. This measure offers the government an additional tool to broaden its revenue base and enhance financial flexibility. While the initiative is expected to yield positive outcomes, it also presents challenges – particularly concerns over capital and talent outflows. There is also a risk of overestimating public resistance to this law and misjudging its broader economic consequences. Other GCC countries are unlikely to introduce a personal income tax in the near term. However, Oman’s experience may serve as a potential model should they consider a similar measure in the future.
Emirates Policy Center | Opportunities and Challenges of Introducing Income Tax in Oman
