Oman will introduce a 5% income tax on high-income individuals starting in 2028, becoming the first Gulf Cooperation Council (GCC) state to implement personal income taxation, a major shift in the region's long-standing tax-free environment. The tax will apply to individuals earning more than 42,000 Omani rials annually (approx. $109,000), affecting roughly the top 1% of earners, according to the state-run Oman News Agency. The policy aims to diversify government revenue sources and reduce the Sultanate's reliance on oil exports. Omani Minister of Economy Said Al‐Saqri confirmed the move late Sunday, stating the government remains committed to protecting social spending while progressing with broader fiscal reforms. The GCC region, which includes Saudi Arabia, UAE, Bahrain, Kuwait, Qatar, and Oman, has traditionally attracted high-income foreign professionals by offering tax-free income. Oman's decision breaks from that model but is expected to remain competitive due to the tax's limited scope. The International Monetary Fund (IMF) has previously advised Gulf nations to consider personal income tax as part of long-term strategies to prepare for declining oil demand. Oman has already taken steps to modernize its economy, including raising $2 billion through the IPO of its state energy company's E&P unit last year. The new income tax policy forms part of a broader reform agenda to ensure fiscal sustainability in the post-oil era. — Agencies
