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Oman expected to initiate personal income tax in 2023: Report
If implemented, Oman would be the first GCC state to impose a tax on personal income
By News Desk - April 22 2022
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(Photo credit: Al-Monitor)

Unnamed sources at Oman’s National Program for Fiscal Balance told Al-Monitor on 22 April that the sultanate is on the verge of introducing a personal income tax, which has been on the Gulf state’s agenda for about two years.

“Income tax is still on track,” one of the sources said. “We just finished the drafting of the law and we are conducting operational readiness. We expect the personal income tax to go live in 2023, provided that it receives all approvals including the royal decree.”

“Oman is more likely to bring personal income tax in the range of 5–9 percent,” chief executive of tax consultancy firm Andersen in the UAE, Anurag Chaturvedi, told Al-Monitor.

It is expected that foreign nationals will be subject to the tax on Oman-sourced income above a threshold of $100,000, while Omanis will be taxed on any net income above $1,000,000, Chaturvedi added.

In the event that the policy is implemented, Oman would become the first GCC member state to impose a personal income tax, as the Gulf region has been described as one of the world’s largest hub of tax-free wages.

This has caused some speculation that other GCC countries may be influenced by the decision, if approved. “The most likely candidate to follow Oman on personal income tax would be Bahrain,” Jordanian economist Haitham Al-Khoshman said, in light of Bahrain’s few oil reserves and weak fiscal position.

Despite this, however, Oman “may choose to bring personal tax by linking it with permanent residency or other incentives to make it attractive,” given that tax-free income has been successful in creating appealing work destinations in the Gulf states, Chaturvedi said.

In May of last year, Oman witnessed nationwide protests over unemployment rates and an unstable economy which is vulnerable to global fluctuations in oil prices, as well as resentment towards the sultanate’s political elite.

The possible implementation of the personal income tax would be an attempt by Omani leadership to improve the country’s economy and strengthen political stability.

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