Oman has officially announced that it will impose a personal income tax starting in 2028, marking a historic shift in Gulf policy. As the first Gulf Cooperation Council (GCC) nation to take this step, the country aims to strengthen fiscal resilience amid fluctuating oil revenues.
Targeted Tax on Top Earners
According to a royal decree, individuals earning more than 42,000 Omani rials (roughly US $109,000) annually will be taxed at a flat 5% rate.This threshold affects approximately 1% of the population . The law includes exemptions and deductions for essential areas such as education, healthcare, housing, inheritance, and charitable giving.
Fiscal Strategy Behind the Move in Oman
This new tax forms part of Oman Vision 2040 initiative and its medium‑term fiscal plan launched in 2020. The goal is to diversify revenue, lower public debt, and build a more stable economic base. Oil and gas still represent up to 85% of government income; the income tax aims to fill that fiscal gap.
Regional and Economic Implications
Unlike its GCC neighbors, which have historically avoided personal income tax, Oman’s move could influence others to adapt similar strategies. While the UAE and Saudi Arabia have stated no immediate plans, analysts point out that GCC nations are increasingly broadening their tax bases. Modern tax reforms across the region—including VAT and corporate taxes—suggest momentum is building.
What This Means for Residents
The tax applies exclusively to top earners, leaving around 99% of Omani citizens and expatriates unaffected. Authorities expect the impact to be minimal on overall public sentiment, as the changes will primarily target high-income households.
Oman’s groundbreaking step to introduce personal income tax marks a new era in GCC fiscal policy. By focusing on high earners, aligning with global standards, and safeguarding lower-income groups, this move aims for long-term financial stability.
