Oman is on the brink of becoming the first Gulf nation to implement a personal income tax, aiming to diversify revenue sources beyond oil as part of its Vision 2040 plan.
The Oman Vision 2040 is the national reference for economic and social planning for the period of 2021-2040, and the source of national sector strategies and five-year development plans.
The Majlis Al-Shura, Oman's lower house of parliament, approved a draft law and forwarded it to the State Council, the upper house, for final legislative approval.
This decision marks a significant departure in a region known for its no-income-tax policy, historically used to attract expatriates and spur economic growth. According to Sico Investment Bank, Oman's move may prompt similar actions across the Gulf in the medium term.
The proposed income tax rates in Oman are expected to be moderate, likely ranging between 5 per cent to 9 per cent. This measure aims to address concerns among expatriates and foreign investors. Gulf states have increasingly introduced various tax initiatives to finance development and reduce dependency on oil and gas revenues.
