Oman has issued a royal decree to implement a personal income tax, making it the first Gulf Cooperation Council state to do so. Beginning in January 2028, individuals earning above forty‑two thousand Omani rials—roughly one hundred nine thousand US dollars—will be subject to a five‑percent tax on taxable income .

The move forms part of Oman’s Vision 2040 strategy to reduce dependence on oil revenues and broaden public finances. The decree includes deductions and exemptions that account for education, healthcare, inheritance, zakat, donations and primary housing .

Parliamentary bodies, including the Majlis al‑Shura and State Council, have already approved draft tax provisions, with recent amendments raising exemption thresholds and standardising rates—5 percent for expatriates earning above fifty thousand rials and for citizens earning above one million dollars globally .

Legislative changes build on previous fiscal reforms, such as the introduction of a five‑percent value‑added tax in 2021 and the enactment of corporate and excise taxes .

Officials estimate the new personal income tax will affect approximately one percent of the population, primarily high‑income earners. Exemptions aim to shield middle‑class residents from the impact .

Oman’s decree places it at the forefront of tax reform in the Gulf, where no other country currently imposes personal income tax. Neighbouring states have implemented measures such as VAT and corporate taxes, but personal income tax remains unprecedented .

The tax authority has emphasised that implementation, compliance and audit frameworks will be developed ahead of the scheduled start in 2028, as policymakers finalise legal details and enforcement mechanisms .

Global observers note Oman’s step reflects a shift in fiscal policy across hydrocarbon‑dependent economies, seeking sustainable revenue sources amid fluctuating oil markets.