Muscat: The Personal Income Tax Law has been enacted by royal decree. No. 56/2025 contains 76 articles divided into 16 chapters. The legislation will levy a 5% tax on the taxable income of natural persons whose gross annual income exceeds OMR 42,000, derived from specific income types as defined by the law. The legislation will take effect at the start of 2028.
According to the Tax Authority, the Personal Income Tax Law enhances the tax system in accordance with Oman's economic and social circumstances and is consistent with the role assigned to the Tax Authority. It also helps Oman Vision 2040's goals by diversifying income sources and reducing dependence on oil revenues, aiming for 15% of GDP by 2030 and 18% by 2040. Furthermore, the tax intends to encourage wealth redistribution among societal segments, increasing social justice, while supplementing the state budget and financing part of the social protection system.
The Authority also agrees that the implementation of personal income tax is preceded by an in-depth study evaluating its economic and social impacts, using income data from multiple government agencies. The research set a thoughtfully defined exemption threshold, indicating that roughly 99% of Oman’s population will not be liable to this levy.
Notably, the exemption limit is high at OMR42,000, and the tax rate is low at 5%. The legislation also provides deductions and exemptions that reflect social realities in the Sultanate of Oman, such as education, healthcare, inheritance, zakat, contributions, primary housing, and other considerations.
Karima Mubarak Al Saadi, Director of the Personal Income Tax Project, stated that all essential preparations and criteria for enforcing the tax have been finalized. The executive regulations of the law will be published within one year of its release in the Official Gazette.
She informed the Oman News Agency (ONA) that the Tax Authority had created an electronic system to encourage voluntary compliance and had connected it with the relevant departments to guarantee correct income calculation and validation of tax declarations. The Tax Authority has also expanded its staff through specialized training programs that align with tax implementation standards. Furthermore, instruction manuals for natural and legal individuals will be created on a set timetable.
