Oman mulls introducing income tax
5 Nov 2020
Oman is set to introduce an income tax on high earners in 2022, the first of the Gulf states to make such a move
5 Nov 2020
Currently none of the six Gulf Cooperation Council (GCC) states, all of which are oil producing nations, collect income tax from individuals.
However, pressures on local budgets as a result of falling oil prices has seen countries in the region reconsider their taxation regimes.
In 2016 all six (Oman, UAE, Saudi Arabia, Bahrain, Kuwait, Qatar) agreed to introduce a form of VAT. So far, Saudi Arabia, Bahrain and the UAE have gone ahead, with Oman and Kuwait set to follow next year.
Now Oman’s finance ministry has also indicated in its 2020-2024 economic plan that it is considering imposing a wealth tax in order to make government finances more sustainable as Covid-19 takes its toll on business activity.
The International Monetary Fund has estimated that Oman’s budget deficit will reach nearly 19% of GDP this year. The new economic plan is projected to reduce that to 1.7% by 2024, according to a statement from the ministry of finance.
The proposed tax would apply to high-income individuals, but the plan does not specify what the income brackets would be.