Muscat– In a step that is the first of its kind at the level of countries Gulf Cooperation CouncilApproach Sultan Haitham bin Tariq The income tax law on individuals, according to Royal Decree No. 56/2025, to become the Sultanate of Oman, the first Gulf country to submit this direct tax transformation.
The new law includes 76 articles distributed over 16 chapters, and it is scheduled to enter into force in early 2028. Individuals whose annual total income exceeds 42 thousand Omani riyals (109 thousand dollars), by imposing a 5% tax on taxable income.
Towards the diversification of revenues
The income tax imposition is part of a comprehensive plan to achieve the goals of the “Oman 2040” vision, which aims to diversify the sources of national income and reduce dependence on oil returns, which still constitute between 68% and 85% of the total public revenues, depending on the fluctuations of global oil prices.
The law aims, according to the Omani Tax Authority, to:
- Support of financial stability.
- Restore wealth to enhance social justice.
- Allocating part of its revenues to finance the social protection system.
Assure Omani Minister of Economy Dr. Saeed bin Muhammad Al -Saqri that the law represents a strategic step to enhance and diversify public revenues. He said, “The tax is a new tributary to diversify the sources of public revenues and avoid the risks associated with oil relying as a major source of revenue, while maintaining the continuity of social and service spending levels, and ensuring financial and economic stability that has been achieved during the past years.”
Al -Saqri added that more than 190 countries around the world apply this type of tax, and income taxes often constitute the largest part of the revenues of those countries, which makes this step consistent with global economic trends.
He pointed out that the application of this tax in Oman carries with it many economic benefits, the most prominent of which is the support of the national strategy to diversify the sources of income and achieve long -term financial stability as one of the pillars of economic growth, as well as the continued confidence of investors in the Omani economy.
The tax is also a sustainable source of government revenues, which contributes to preserving the durability of the state’s financial position and quality Its credit ratingIn addition to supporting economic spending, and increasing the purchasing power of the groups benefiting from their revenues, which is directly and positively reflected in the volume of total demand and economy growth.
According to the minister, the application of the law will help enhance the state’s ability to continue to finance the vital sectors, foremost of which is health, education, and social protection. In the budget of the fiscal year 2025, more than 5 billion Omani riyals (13 billion dollars) for social sectors, of which 39% for education, 24% for health, and 28% for the social protection system that benefits nearly two million people benefit per month.
Decreased exemptions and limited effect
According to the tax apparatus, the law was based on an expanded study to measure the economic and social impacts, and an annual exemption of 42 thousand Omani riyals has been adopted, which means that 99% of citizens will not be included in the tax. The law also included social exemptions, including zakat, donations, health and educational expenditures, and basic housing.
The director of the tax on individuals ’income project, Karima Bint Mubarak Al -Saadia, confirmed that the tax apparatus has completed all the equipment required for the application of the law, including the allocated electronic system, a comprehensive guide, in addition to training the concerned human cadres. She explained that the executive regulations of the law will be issued within a year from the date of its publication.
Support and reservations
The new step sparked a wide discussion and a variation in opinions within the Omani society. While some see it as a necessity to enhance financial justice, others express concerns related to the timing of application and its social and economic repercussions.
“The income tax is not a burden, but rather a reflection of the maturity of the economy and community participation in building the state. It is important to look at the income tax with consciousness that goes beyond the traditional idea that it is just a financial deduction.”
On the other hand, economic analyst Khalfan Al -Touqi expressed some reservations, stressing the need for the government to balance the financial return and the possible effects on society and the economy. He said, “The application of the tax requires an accurate study of Omani privacy and the expectation of societal reactions.”
Al -Touqi pointed out that the use of international consultants may not necessarily take into account local privacy, calling for the benefit of national competencies in preparing more realistic studies. He asked: “Are we ready to bear the consequences of this tax without sufficient guarantees for its justice and transparency?”, As raised important questions, including: “Will the citizen pay a tax in exchange for a broader political representation? Will this tax translate into tangible services?”, And stressed the importance of ensuring justice and transparency in the application, without exceptions.
He warned of the possibilities of tax evasion, especially from the high -income groups, stressing the importance of effective control over the application of the law to ensure its success.
For his part, economic writer Yahya Al -Awfi said that the law affects only 1% of citizens, and has taken into account the local social and economic conditions. But he added that the government should expand investment opportunities, to avoid excessive dependence on taxes as an income source.
As for the citizen Ahmed Al -Shibli, he expressed his support for the law, saying: “Imposing a tax on high -income people enhances the principle of financial justice. This law does not affect the middle class, but rather contributes to strengthening the national economy.”
Malian turning point
With the end of the tenth five -year plan, the income tax on individuals is a turning point in the path of Omani economic policies, as it is consistent with the aspirations of the “Oman 2040” vision that puts at the core of its goals to achieve financial sustainability, a fair distribution of wealth, and enhance the confidence of society and investors in the state.
Despite the continuing questions about the timing of implementation and areas of revenue spending, early efforts to prepare for the law, as well as clarity of standards and application mechanisms, are essential factors for gaining community confidence and ensuring the success of the transition to a more just and sustainable tax system.