MUSCAT, OCT 19
Personal Income Tax (PIT), set to be levied on high-earning individuals in the Sultanate of Oman from 2028, has been thoughtfully conceived to ensure its introduction does not undermine the competitive edge of the country’s capital market, a senior government official has affirmed.
Mahmood al Aweini, Secretary General of the Ministry of Finance, said the new levy — the first of its kind in the Gulf region — has been carefully studied by the authorities and will continue to be evaluated for any potential negative impacts. Should any such impacts arise, “we have the tools to make sure we return things to the right competitive edge to make the market attractive again”, he stated.
The official made these remarks during the 2025 Annual Conference of the Middle East Investor Relations Association, held recently. He was responding to a question from the session moderator, Azza al Habsi, Assistant Vice President — Economic Research & Emerging Trends at Ominvest, who asked how the government planned to ensure that including capital market gains under the proposed PIT regime would not erode progress made in developing Oman’s capital market and enhancing its regional competitiveness.
Al Aweini clarified that the introduction of PIT was not an arbitrary move but the outcome of extensive studies assessing its potential impact and the overall value it could add to the market.
He noted that Oman had shown leadership by being the first in the region to pursue this reform and emphasised that there would be ample time for the market to adjust before the tax takes effect in 2028. He stressed that the government’s objective is to make the capital market more attractive and competitive, assuring investors that no measures would be taken that contradict this goal.
Citing the successful rollout of Value Added Tax (VAT) during the Covid-19 pandemic — when inflation fears were effectively contained — Al Aweini expressed confidence that similar agility and policy responsiveness would mitigate any potential impact of PIT on investors or the market.
Commenting later on the official’s remarks, Ominvest’s Azza al Habsi observed: “The key takeaway for me was Al Aweini’s emphasis that the government is closely monitoring market signals and remains firmly committed to capital market development”.
She added: “To be fair, the fact that implementation has already been delayed to 2028 is itself a sign of a thoughtful, measured approach. It gives policymakers time to observe, learn and refine the execution if needed”.
The new tax will be levied at a flat rate of 5 per cent on annual incomes exceeding the threshold of RO 42,000 (approximately $109,000). However, deductions will be permitted for education and healthcare expenses, zakat contributions, charitable donations and other eligible items.
Oman Observer is now on the WhatsApp channel. Click here
