Dubai, 23 June (IANS). Oman has become the first country in the Gulf region to announce income tax. This historical step has been taken towards raising additional revenue for the country’s economic development schemes.
According to the State Omani news agency, this five percent income tax will be applicable from January 2028 and will only apply to those whose annual income is 42,000 Omani Rial (about 1.09 million US dollars) or more. This means that this new tax will only affect the top one percent income group.
None of the six member countries of the Gulf Cooperation Council (GCC) currently levies income tax and this tax-free system is considered particularly attractive for migrant workers, especially in countries such as Saudi Arabia, UAE and Qatar.
Oman’s Finance Minister Saeed bin Mohammad al-Sakri said that this step has been taken to free the country from dependence on oil and to make public revenue diverse, while social welfare expenses will remain unchanged.
The Finance Ministry said that the individual income tax (PIT), which came into force from the beginning of 2028, is an important step towards strengthening the country’s financial stability and completing the outline of fiscal sustainability. It aims to ensure permanent funding for various areas of development.
The minister said, “This new tax will help to diversify public income by becoming an alternative source of revenue and reduce the risks associated with excessive dependence on oil. It will be achieved by maintaining the expenditure on social and service sectors, the goals of Oman Vision 2040 and 10th Five Year Plan (2021-2025) will be achieved.”
He said that this tax system will give long -term stability to Oman’s economy, strengthen government revenue, will also promote the country’s credit rating, public spending capacity and economic demand.
The minister also stated that currently 68 percent of Oman’s total government revenue comes from oil and gas, which depends on global energy prices and is highly unstable. Oil prices may have been stable in recent years, but there is a risk of their unstable.
Oman has used additional oil income effectively in measures such as reducing public debt, increasing investment and social spending and subsidizing essential goods and services.
-IANS
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