Oman dismisses expats’ income tax fears

Oman’s government has confirmed it has no plans to begin taxing expats following reports that Saudi Arabia may impose income tax on foreign residents.

The sultanate’s Ministry of Manpower confirmed to local media it has no immediate plans impose such a measure, despite the small oil exporter suffering the effects of low prices.

Saudi’s finance ministry recently confirmed it was planning to introduce income tax on its expatriate population to fund its $72b National Transformation  Plan to diversify economy. However, following reports in the media leaders quickly backtracked and denied anything had been decided.

Following this, Oman’s Ministry of Manpower issued a statement dismissing fears of such a measure, and adding that any introduction of tax would include the entire population.

Speaking to the Times of Oman, he said: “We are not encouraging this. Every country has its own procedures, and in this country, we do not encourage such a tax. If there is any kind of tax, it will be for everyone, expats and Omanis. Expats are not strangers for us, and they work according to the Labour Law. The Labour Law controls all the expats and it does not involve income tax.”

Following 18 months of plummeting oil revenues, Oman began 2016 with a budget deficit of $8.6 billion.

The sultanate plans to cut the deficit by two-thirds through cuts to subsidies on utility bills, housing loans, fuel and other goods. These will be  400 million rials ($1.0 billion) this year, down from 1.11 billion rials in 2015, the ministry said in a statement on the 2016 budget earlier this year.

The country also plans to cover the gap with 1.5 billion rials worth of reserves, 900 million rials in borrowing from the international market, 600 million rials of grants, and 300 million rials of borrowing from the local market, the ministry said at the time.