Tue Jun 24 02:54:21 UTC 2025: **Summary:**
Oman plans to introduce a 5% personal income tax in 2028 for the top 1% of earners (above $109,000 annually). This is a first for the Gulf Cooperation Council and aims to diversify the sultanate’s economy away from its heavy reliance on oil and gas revenues, which can constitute up to 85% of public income. The move is part of Oman’s Vision 2040 project, which aims to transform the nation into a technology-based economy. The International Monetary Fund has previously suggested that other Gulf states may need to impose new taxes to diversify revenues.
**News Article:**
**Oman to Introduce Income Tax in Groundbreaking Shift for Gulf Region**
*Dubai -* In a move that could reshape the economic landscape of the Gulf, Oman has announced plans to levy a 5% personal income tax, starting in 2028. The tax, targeting only the top 1% of earners in the sultanate, those making over $109,000 annually, marks a significant departure from the region’s traditionally tax-free environment.
The announcement, made Sunday, June 22, 2025, by royal decree, is part of Oman’s broader “Vision 2040” project, which aims to diversify the nation’s economy away from its heavy dependence on hydrocarbons.
“This income tax will further prioritise financial stability by diversifying revenue sources,” stated Minister of Economy Said bin Mohammed Al-Saqri, according to the Oman News Agency. He emphasized that the new revenue stream will mitigate risks associated with the reliance on oil, which currently accounts for up to 85% of the nation’s public income.
The International Monetary Fund has previously indicated that Gulf states may need to consider new taxes to bolster government revenues. While the lack of income tax has historically attracted migrant workers and fueled development in the region, Oman’s decision reflects a growing need for economic diversification and stability.
The introduction of the income tax follows other fiscal reforms, including a 2020 program aimed at reducing public debt and boosting economic development. The world will be watching to see if this groundbreaking move by Oman inspires similar reforms in other Gulf states.
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