Oman is set to make history as the first country in the Gulf Cooperation Council (GCC) to introduce personal income tax, with a five per cent levy scheduled to take effect from 2028.
Under Royal Decree No. 56/2025, the tax will apply to individuals earning more than 42,000 Omani riyals per year — equivalent to around Dh400,000. The move is a key component of the Sultanate’s broader strategy to diversify its revenue streams and reduce reliance on oil.
Authorities confirmed that the groundwork for the new system has been completed, with the legislation allowing for exemptions and deductions in areas such as healthcare, education, donations, inheritance, zakat, and primary housing — all in line with Oman’s social welfare considerations.
Karima Mubarak Al Saadi, director of the Personal Income Tax Project, said in a Khaleej Times report that the law was developed with careful attention to national priorities and would impact only a small segment of the population. Studies show that about 99 per cent of residents will not fall under the new tax bracket.
Tax expert Thomas Vanhee, founder partner of Aurifer Middle East Tax Consultancy, said the law marks a significant shift in regional tax policy. “Oman is now the first GCC country to legislate a personal income tax regime,” he noted, calling it a “progressive policy” aimed at protecting lower- and middle-income earners while modestly taxing higher-income brackets.
With three years before the tax is enforced, Vanhee added there is sufficient time for residents and businesses to prepare for the change.