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Oman’s New Income Tax Will Offer a Test Case for the Arab Gulf

Nov 3, 2020 | 21:44 GMT
A man walks past the flags of the countries attending the Gulf Cooperation Council (GCC) summit in Kuwait City, Kuwait, on Dec. 5, 2017.

A man walks past the flags of the countries attending the Gulf Cooperation Council (GCC) summit in Kuwait City, Kuwait, on Dec. 5, 2017.

(GIUSEPPE CACACE/AFP via Getty Images)

Oman’s proposal to adopt a personal income tax for the wealthy in 2022 underscores the growing shift taking place within the Arab Gulf states to reduce their heavy reliance on oil and gas revenue. On Nov. 1, Oman’s finance ministry published details on its 2020-2024 economic plan, which aims to decrease the country’s fiscal deficit down to 1.7 percent of GDP by 2024. Specifically, the plan seeks to improve Oman’s pandemic-battered fiscal balance by reducing government expenditures and boosting non-oil revenue through the new income tax, among other measures. While personal income taxes have long been politically and culturally unpalatable in the Arab Gulf, popular attitudes are shifting as governments experiment with such revenue-generating reforms. Oman’s experience introducing a new income tax will thus become a test case for what is possible in the other Gulf Cooperation Council (GCC) states....

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