There has been a lot of news about Oman introducing income tax on individuals in 2022.
What stands behind this news? My Best CFO Team looked into the matter.
Oman Ministry of Finance has issued Medium Term Fiscal Plan (MTFP) 2020-2024, which became available on 02 November 2020 and which states that:
A. Fiscal deficit is to be decreased from 15.8% of GDP in 2020 down to 1.7% of GDP in 2024.
B. MTFP has 5 Pillars to achieve goal:
1. Supporting Economic Growth
2. Diversifying and Enhancing Government Revenues
3. Rationalizing Government Expenditures and Driving Efficiency
4. Enhancing the Social Safety Net
5. Strengthening Public Financial Management
C. Diversifying and Enhancing Government Revenues (#2) includes 4 Initiatives:
1. Enhancing Revenues From Government Investments
2. Strengthening Tax Administration And Collection Efficiency
3. Value Added Tax
In line with the GCC VAT Treaty The Sultanate introduced VAT by the issuance of Royal Decree No 2020/121 on October 12, 2020. The Value Added Tax (VAT) will be imposed within 180 days from the date of publication of Royal Decree in the Official Gazette.
4. Income Tax on High Earners
The MTFP 2020-2024 describes it as: “The government is actively looking at all sources in order to plug the gap in the deficit. This includes looking at personal income tax…. Currently the government is evaluating the tax and how it can be best implemented. The government will evaluate the tax from all aspects, including societal impact, economic impact and fiscal impact. In order to ensure the most efficient and equitable tax for all.”
No more details regarding implementation year, applicability to expats/locals, high earners brackets and etc. are officially provided.
Should you need any help or have questions, My Best CFO Team is always happy to help you.
Source: Ministry of Finance’s Medium Term Fiscal Plan 2020-2024 published on official website of Ministry of Finance of Oman
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