GCC: Oman will be first to impose personal income tax

Source: Middle East Insurance Review | Dec 2020

Oman is set to become the first country in the GCC to introduce an income tax on individuals to reduce a growing fiscal deficit.

According to the IMF, Oman’s economy could contract by 10% this year. Declining energy prices and the COVID-19 pandemic have hit the economy.

The sultanate plans to introduce in 2022 a personal income tax on wealthy individuals, reported Reuters. It is cutting government spending and is already preparing to implement a VAT with effect from 1 April 2021.

Elsewhere in the GCC, the tax authorities in Kuwait plan to introduce VAT at 5% from 1 April 2021. The UAE, Saudi Arabia and Bahrain have already introduced VAT. In fact, the Saudi government increased the VAT rate from 5% to 15%, effective 1 July 2020, in the wake of COVID-19.

No details have been released so far on how the income tax could affect insurance. M

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