In a major policy shift, Oman has enacted its first Personal Income Tax Law, set to take effect on January 1, 2028. The move is part of the Sultanate’s Vision 2040 strategy, which aims to strengthen economic sustainability and reduce dependence on oil revenues.
The new law, issued under Royal Decree No. 56/2025 by Sultan Haitham bin Tarik, introduces a 5% tax on individuals earning more than OMR 42,000 annually. According to the Tax Authority, this high exemption threshold means that 99% of Oman’s population will not be affected.
Exemptions will apply to essential expenses and obligations, including:
- Education
- Housing
- Healthcare
- Zakat and charitable donations
The law also calls for the development of an electronic compliance system that will connect with government databases to ensure accurate reporting. Executive regulations will be published within a year.
The tax will join Oman’s existing revenue sources — such as corporate tax, VAT, and selective taxes, which together generated OMR 1.4 billion in 2024. This latest move is expected to bolster non-oil revenues and support investor confidence.
As other Gulf countries consider similar fiscal reforms, Oman is taking a proactive step toward long-term financial resilience.
