Personal Income Tax Law to Take
Effect in 2028

Muscat, 22 Jun (ONA) — The
Personal Income Tax Law issued by Royal Decree No. 56/2025 consists of 76
articles distributed across 16 chapters. The law will impose a 5% tax on the taxable
income of natural persons whose gross annual income exceeds RO 42,000, derived
from specific income types as defined by the law. The law will come into effect
at the beginning of 2028.

The Tax Authority said that the
Personal Income Tax Law complements the tax system in line with Oman’s economic
and social conditions and aligns with the role assigned to the Tax Authority.
It also contributes to the objectives of Oman Vision 2040 by diversifying
income sources and reducing reliance on oil revenues, with targets of 15% of
GDP by 2030 and 18% by 2040. Additionally, the tax aims to promote wealth
redistribution among societal segments, enhancing social justice, while
supporting the state budget and specifically financing part of the social
protection system.

The Authority also affirms that the
implementation of the personal income tax follows an in-depth study assessing
its economic and social impact, based on income data from various government
entities. The study established a carefully considered exemption threshold,
revealing that approximately 99% of Oman’s population will not be subject to
this tax.

Notably, the exemption threshold is
set high at RO 42,000, and the tax rate is low at 5%. The law also includes
deductions and exemptions accounting for social considerations in the Sultanate
of Oman, such as education, healthcare, inheritance, zakat, donations, primary
housing, and other factors.

Karima Mubarak Al Saadi, Director of
the Personal Income Tax Project, confirmed that all necessary preparations and
requirements for implementing the tax have been completed. The executive
regulations of the law will be issued within one year of its publication in the
Official Gazette.

She told Oman News Agency (ONA) that
an electronic system has been developed by the Tax Authority to promote
voluntary compliance and has been linked with the departments concerned to
ensure accurate income calculation and verification of tax declarations. The Tax
Authority has also strengthened its workforce through specialized training
programs in line with the tax implementation requirements. Additionally,
guidance manuals for natural and legal persons will be published according to a
predetermined schedule.

— Ends/Khalid