MUSCAT : The Individual Income Tax Law, comprising 76 articles across 16 chapters, was announced by the Oman News Agency and aims to strengthen the Sultanate’s public finances while aligning with the broader goals of Oman Vision 2040. According to the Tax Authority, the law has been carefully designed to complement the existing tax framework, taking into account both economic realities and social considerations.

Under the new legislation, a 5% tax will be levied on natural persons earning more than RO 42,000 annually. However, the Authority emphasized that nearly 99% of Oman’s population will not be affected, highlighting the law’s targeted approach to apply only to high-income individuals.

The introduction of the tax follows an in-depth impact study that drew on data from multiple government bodies to assess income levels and determine a socially responsible exemption threshold. The findings revealed that the tax would primarily affect the top income bracket, ensuring the vast majority of citizens are protected.

Revenues generated from this tax will be channeled toward funding Oman’s social protection system, reinforcing efforts to promote social justice and diversify state income away from oil dependency.

To support lower-income groups and ensure fairness, the law includes a range of exemptions and deductions, particularly in critical areas such as education, healthcare, primary housing, zakat, donations, and inheritance.

The Tax Authority called the new tax a pivotal measure to achieve financial sustainability, redistribute wealth more equitably, and foster solidarity across all segments of Omani society.

For all the latest news from Oman and GCC, follow us on Twitter, Instagram and LinkedIn, like us on Facebook and subscribe to our YouTube page, which is updated daily.