Big step from Oman, becoming the first among the GCC countries to introduce a personal income tax.

Starting January 1, 2028, a modest 5% tax will come into play, but here’s the kicker – it’s only for folks earning over OMR 42,000 (that’s roughly $109,000) a year. This isn’t just a random decision; it’s part of Oman’s grand plan, Vision 2040, to give their economy a stronger, more diverse footing and rely less on oil. So, if you’re a professional in Oman, or thinking of becoming one, this is definitely something to get acquainted with!

Who’s Affected?

Here’s the really interesting part: this tax is aimed squarely at the top 1% of earners. That means a whopping 99% of Oman’s population won’t be affected by it, thanks to that generous OMR 42,000 threshold.

Let’s put it in perspective. Say you’re pulling in OMR 50,000 annually. You won’t be taxed on the whole amount, just the OMR 8,000 above that threshold. So, at a 5% rate, that’s just a OMR 400 tax bill. Not too shabby, right? And yes, this applies to all residents, including our expat friends, and covers everything from your salary and business profits to your investments – basically, your global income.

Deductions for Fairness

The folks in charge aren’t just taking; they’re also making sure it’s fair. They’ve built in some helpful deductions to soften the blow. You’ll likely be able to deduct things like:

  • (a) Education expenses (think school fees for the kids – a big relief!)
  • (b) Healthcare costs
  • (c) Housing expenses (whether you’re renting or paying a mortgage)
  • (d) Zakat and other charitable donations


These little reliefs are designed to bring down your taxable income, which feels pretty fair to me! We’ll get the nitty-gritty details on these deductions when the executive regulations are released by late 2026.

Why Are They Doing This Now?

  • Oman, like many nations, has been on a roller coaster ride with oil prices. They know they can’t put all their eggs in one basket forever. This 5% tax is a strategic move, directly supporting their Vision 2040 goals:

    • (a) Pumping up non-oil GDP to a cool 18% by 2040.
    • (b) Funding essential public services – think better healthcare and education for everyone.
    • (c) Building a financial fortress for a future where oil might not be the king it once was.


    And let’s be honest, when you compare Oman’s 5% rate to the 20-40% you see in many other countries, it really does keep them super competitive on the global stage.

What This Means for You, the Professional

    • (a) For Individuals: If you’re not in that top 1% bracket, you likely won’t feel a thing! And for those who are, remember those helpful deductions. Plus, if you’re an expat, double taxation agreements might give you some extra breathing room.
    • (b) For Businesses: No direct corporate tax here, which is great! But you might need to tweak your payroll systems a bit to help your employees with their reporting.
    • (c) For the GCC: This is a truly historic move for the region. It’ll be fascinating to see if Oman’s bold step encourages other GCC nations, who mostly rely on VAT right now, to consider their own income tax adventures.

Let's Get Ready for 2028!

  • There’s no time like the present to start keeping an eye on your income and expenses. Stay in the loop by checking updates from the Omani Tax Authority, or even better, have a chat with a tax pro to make sure you’re all set.

    Oman’s 5% tax isn’t just about money; it’s a confident stride towards a more sustainable future, balancing fairness with fantastic economic growth. What do you think about this whole new chapter? I’d love to hear your thoughts – let’s get a discussion going!