(MENAFN- Khaleej Times)
Oman is expected to roll out personal income tax, making it the first country in the GCC to do so, some time next year.
This comes after the kingdom's Shura Council advanced the draft law to the State Council. Since the bill is nearing the end of its legislative approvals, it is likely to be introduced in 2025. The initial bill was drafted back in 2020.
Analysts expect other Gulf Cooperation Council (GCC) countries to also introduce the personal income tax, however, not in the near future. Oman could be used as a template to launch the tax in other GCC countries.
Stay up to date with the latest news. Follow KT on WhatsApp Channels.
As reported by Khaleej Times last year, Haji Al Khouri, undersecretary of the UAE's Ministry of Finance, said that the UAE has no plan to introduce personal income tax . Global financial institutions have been encouraging the UAE and other GCC countries to introduce new taxes in order to expand their revenues, away from the petrodollars. The UAE recently introduced a 9 per cent tax on corporate incomes to boost its revenues.
Most expatriates and nationals in Oman, will not be impacted by this new tax regime. Quoting reports, Emirates NBD Research said that foreign nationals will be liable to PIT of 5 per cent to 9 per cent on income from Oman over $100,000. For Omani citizens, the threshold will be orders of magnitude higher at net global income over $1 million, which would be taxed at 5 per cent.
“Initially, at least the new PIT will not impact the majority of people in Oman, whether expatriate workers or citizens,” Emirates NBD Research said in its latest on the UAE's neighbouring country.
“The new PIT could be introduced as early as 2025 which would put the country back in the vanguard of widening the tax base in the GCC. Oman has long had a corporate income tax, even in a limited capacity. It was introduced in 2009 and raised from 12 per cent to 15 per cent in 2017, with the tax only now introduced in the UAE. However, Oman subsequently lagged behind the UAE and Saudi Arabia in introducing VAT,” it added.
There are 2.2 million expats in Oman, making up 42.3 per cent of the total population of 5.2 million. Within this 2.2 million, the majority (1.4 million) have an educational attainment level of less than a general diploma.
“While it is not a perfect indicator of income, only 214,503 expat workers have a bachelor's degree or higher diploma so the number of foreign workers on the kind of $100,000-plus salary that would be liable to PIT is likely lower still than this – so fewer than 4.2 per cent of the population at large. The number of Omani citizens meeting the $1 million annual income threshold is likely to be similarly small,” it said.
ALSO READ:
UAE's tax-free higher salaries a major draw as tech talent from Europe prepare for 'mass exodus'
UAE, Qatar sign double taxation avoidance agreement
MENAFN17072024000049011007ID1108452013
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.