Dubai, Jun 24 (AP) Oman plans to levy personal income tax as part of a broader push to move the sultanate's economy away from reliance on hydrocarbons.

The tax would be a first among the six-member oil-rich Gulf Cooperation Council. The 5% tax will start in 2028 and will only be required of those who make upward of $109,000 annually — the top 1% of earners in Oman.

The plan was issued Sunday by royal decree and reported by the official Oman News Agency.

It's unclear whether this will inspire other nations in the area to follow suit, though the International Monetary Fund has predicted that Gulf states may need to impose new taxes in the coming years to diversify government revenues.

The lack of income tax so far has been a boon for development in the Gulf, helping to attract migrant workers to the region.

But for Oman, the introduction of the income tax “will further prioritize financial stability by diversifying revenue sources” that will help shelter the country from “fluctuations” in the global energy market, Minister of Economy Said bin Mohammed Al-Saqri said He added that oil and gas revenues can account for up to 85% of the nation's public income, depending on the market.

"The tax serves as a new revenue stream to diversify public income sources and mitigate risks associated with reliance on oil as the primary revenue source," Al-Saqri said.

Oman has been weighing the personal income tax for several years, and its introduction follows other fiscal reforms. In 2020, it rolled out a programme to cut down public debt and boost economic development. The move, Al-Saqri said, is part of Oman's broader Vision 2040 project, which hopes to turn the country into a technology-based economy. (AP) SCY SCY

Personal income tax introduced in Oman to diversify revenue and reduce hydrocarbon dependence, targeting top earners. Oman will introduce a personal income tax at a five percent rate starting in 2028, applying only to income above a high threshold that captures the top one percent of earners; the levy is presented as part of Vision 2040 fiscal reforms to diversify revenue and reduce dependence on oil and gas receipts.