November 04, 2020

Andrew Campbell 

The Oman’s Ministry of Finance announced on November 1 and revealed its unprecedented plan to introduce an income tax on the country’s wealthy individuals starting in 2022. According to the mid-term fiscal plan 2020-2024 report, the Ministry of Finance estimated the new income tax on high earners will increase the government’s revenues to Omani Rial/OMR 12.1 billion (USD 31.43 billion) by the end of 2024.

Since disastrous low oil prices commenced in 2014 Oman, Saudi Arabia and the United Arab Emirates governments have introduced value-added taxes to tackle escalating budget deficits in government treasury. As the unexpected crisis caused by the COVID-19 pandemic and social lockdowns has stricken Oman, the government started to consider economic reforms to keep up generous state benefits and subsidies on public services.

None of the 7 oil producers in the Gulf Cooperation Council (GCC) currently collect income tax from their individuals. Thus, it is a significant move for Oman becoming the first country in the Gulf to impose an income tax on wealthy individuals. Undoubtedly, it would be closely watched by other GCC states.

Photo:Webshot.