Oman income tax expected in 2022

dubai — Oman expects to introduce an income tax on high earners in 2022, the finance ministry said in a 2020-24 economic plan, new details of which were published late on Sunday, as the Gulf state seeks to restore finances battered by low oil prices.

The plan aims to bring Oman’s fiscal deficit down to 1.7 per cent of GDP by 2024, from a preliminary deficit of 15.8 per cent this year.

It also has a target of increasing non-oil revenues to 35 per cent of total government revenue by 2024, from 28 per cent this year.

None of the six GCC states, all oil producers, currently collect income tax from individuals.

Oman’s leader, His Majesty Sultan Haitham bin Tariq Al Said, who took power in January, last month approved the mediumterm fiscal plan to make government finances sustainable as the coronavirus crisis and low oil prices strain state coffers.

Some details of the plan emerged in a bond prospectus last month but without a date for the introduction of income tax. Revenues from it would be used to fund social programmes, the plan said.

“An income tax on individuals would be a first in the Gulf. I think it will be a significant move and closely watched by other GCC countries,” said Monica Malik, chef economist of Abu Dhabi Commercial Bank. “This initiative is still under study, all aspects of its application are being considered. It is expected to apply this tax in 2022,” the 2020-24 mediumterm economic balance document said.

The International Monetary Fund projects Oman’s economy is expected to shrink by 10 per cent this year. —