Employment Tax
Oman | Oman set to be the first Gulf country to introduce income tax
Summary
Oman may soon become the first Gulf nation to introduce a personal income tax (PIT), as it seeks to diversify revenue streams beyond oil in line with its Vision 2040 plan.
The Detail
The proposed PIT legislation has been moved from Oman’s Shura Council to the State Council, indicating strong legislative momentum. The Council of State is expected to make only technical comments, suggesting a high likelihood of enactment. This tax framework aims to reduce Oman’s dependence on oil revenue, ensuring fiscal sustainability and funding public services and infrastructure. The proposed tax will apply to:
However, the exact rates and further details are still to be finalized. It is anticipated that the tax levy may be defined in 2024 and potentially come into effect from January 2025.It may be noted however that the initial bill was first introduced with implementation initially planned for 2023.
What this means
If passed, the PIT will be the first of its kind in the GCC region, impacting high-earning foreign workers and wealthy Omani citizens. The introduction of PIT is seen as essential for reducing Oman’s fiscal deficit and ensuring long-term economic stability, especially given the volatility of oil prices. This legislation will provide a stable and diversified revenue stream, enabling additional investment in public services, infrastructure, and social programs.
While Oman’s proactive stance on PIT might serve as a blueprint for similar reforms in the Gulf region, it appears unlikely that other GCC countries will follow in the near future. Earlier this year, both Saudi Arabia and the UAE reaffirmed their firm stances against introducing PIT. Additionally, tax reform proposals in the GCC, such as Bahrain’s exploration of remittance taxes in 2023, have rarely progressed. However, Oman’s proposal to push forward with a personal income tax framework could still encourage other GCC countries to consider similar tax reforms in the future.
How we can help
At Vialto Partners, we can help you navigate these changes by:
Our team is dedicated to assisting both employers and employees navigate these changes effectively. With our proven track record in tax advisory across the GCC, we are highly qualified to support clients amidst the proposed income tax reforms. Having established ourselves as a trusted presence in the region, we offer tailored solutions that align with local regulations and client objectives. Count on us to navigate complexities and deliver expert guidance tailored to your specific needs, ensuring compliance, and maximizing opportunities.
Contact us
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Michael Edmond
Partner
Jammy Mustafa
Senior Manager
Ayman Rasheed
Manager
Further information on Vialto Partners can be found here: www.vialtopartners.com
Vialto Partners (“Vialto”) refers to wholly owned subsidiaries of CD&R Galaxy UK OpCo Limited as well as the other members of the Vialto Partners global network. The information contained in this document is for general guidance on matters of interest only. Vialto is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will Vialto, its related entities, or the agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this document or for any consequential, special or similar damages, even if advised of the possibility of such damages.
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Further information on Vialto Partners can be found here: www.vialtopartners.com
Vialto Partners (“Vialto”) refers to wholly owned subsidiaries of CD&R Galaxy UK OpCo Limited as well as the other members of the Vialto Partners global network. The information contained in this document is for general guidance on matters of interest only. Vialto is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will Vialto, its related entities, or the agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this document or for any consequential, special or similar damages, even if advised of the possibility of such damages.
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