On 27 June 2024, the Shura Council advanced the draft Personal Income Tax (PIT) bill to the State Council. While the State Council is yet to approve the bill, according to news reports1 , it proposes PIT between 5% to 9% for Oman-sourced income above USD 100,000 for foreign nationals and net income above USD 1,000,000 for Omani citizens. The details and timing of implementation are yet to be officially confirmed.
PIT on high earners in Oman is outlined in the Medium-Term Fiscal Plan 2020-2024 as one of the four measures of diversifying and enhancing government revenues. Oman’s current tax regime already includes Corporate Income Tax (CIT), Value Added Tax (VAT) and Excise Tax. The Oman State Budget for the financial year 2024 estimates collections of OMR 630 million from CIT and OMR 645 million from VAT and Excise Tax. Implementation of PIT is expected to increase tax collections and, as a consequence, the non-oil and gas revenues for Oman.
Why this matters?
Businesses and individuals in Oman should be mindful of the possible implications of the introduction of PIT. Employers (payroll/finance/tax) should examine their current capabilities to operate payroll withholdings for employees and facilitate payroll reporting obligations once PIT is introduced. HR teams should start looking at their talent attraction and retention strategies in light of the changing landscape.
Individuals in Oman should also consider the impact PIT could have on them, such as potential tax liabilities and personal tax compliance obligations.
KPMG has a dedicated team of experienced PIT specialists. If you need assistance with PIT or other tax related matters in Oman, please reach out to your advisors at KPMG or the contacts mentioned below.
Source
Oman pushes forward with personal income tax framework (gulfbusiness.com)