Oman to Impose 5% Income Tax on High-Earning Individuals from 2028

Muscat: Oman will introduce a 5% personal income tax on high-earning individuals starting January 2028, under the newly issued Personal Income Tax Law (Royal Decree No. 56/2025). The law comprises 76 articles across 16 chapters and targets natural persons earning more than OMR 42,000 annually from specific sources defined within the legislation.

According to the Tax Authority, the new law is designed to complement the existing tax framework in line with Oman’s economic and social priorities. It also supports the goals of Oman Vision 2040, particularly in diversifying income sources and reducing reliance on oil revenues, with targets of contributing 15% of GDP by 2030 and 18% by 2040.

The tax aims to strengthen wealth redistribution, promote social justice, and contribute to financing the social protection system. The Authority emphasized that the law is based on an in-depth impact study, drawing data from various government bodies to ensure a socially responsible exemption threshold. As a result, around 99% of Oman’s population will not be subject to the tax.

The tax rate is deliberately set low at 5%, with a high exemption threshold. The law also incorporates exemptions and deductions considering essential social needs such as education, healthcare, primary housing, inheritance, zakat, and donations.

Karima Mubarak Al Saadi, Director of the Personal Income Tax Project, confirmed that all preparations for implementation have been completed. The executive regulations will be issued within one year of the law’s publication in the Official Gazette.

She told Oman News Agency (ONA) that the Tax Authority has developed a dedicated electronic system to ensure accurate income calculation and encourage voluntary compliance. The system is integrated with relevant departments and supported by specialized training programs for staff. Additionally, guidance manuals for both individuals and entities will be released as per a set timeline.