In a historic move aligning with its Vision 2040 plan for Economic Diversification and Fiscal Sustainability, Oman is about to become the first Gulf nation to introduce a personal income tax. This would mark a significant shift in a region traditionally dependent on a no-income-tax policy to attract expatriates and stimulate economic growth.
LEGISLATIVE PROGRESS
The Majlis al-Shura, Oman’s lower house of parliament, approved a draft law, moving it forward to the State Council, the upper house, for final legislative approval. The decision, announced during the Shura’s 12th regular session, underscores Oman’s commitment to diversifying its revenue sources beyond oil.
EXPECTED TAX RATES
The proposed tax rates in Oman are anticipated to be modest, likely ranging between 5 and 9 percent, to mitigate concerns among expatriates and foreign investors.
IMPACT
Taxing personal income might affect Oman’s attractiveness to expatriates, but it is only one of many factors. Combined with broader economic reforms, this tax could enhance transparency and trust, boosting Oman’s regional competitiveness. However, other GCC countries aren´t expected to follow anytime soon.
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