Oman tax, fee revenue hits RO 2.1bn in 2025
Muscat: When Oman introduced VAT in 2021, the question was whether it would stick. Four years on, the answer is in the numbers.
Value-added tax generated RO 631 million in 2025, exceeding the budget estimate of RO 580 million and placing it within touching distance of corporate income tax — the government’s single largest non-oil revenue source at RO 656 million. Together, the two taxes now form the backbone of a fiscal structure that Oman is quietly, steadily building.
Total tax and fee revenue reached RO 2.107 billion in 2025, according to the State’s Final Account for Fiscal Year 2025. That was four per cent above the approved budget estimate of RO 2.027 billion — a modest overshoot, but a meaningful one. Revenue targets in this category have not always been met.
The wider non-hydrocarbon revenue picture was similarly solid. At RO 3.641 billion, it came in slightly above the budget estimate of RO 3.573 billion and represented 30 per cent of total public revenue. The remaining 70 per cent still came from oil and gas.
That ratio defines the challenge. Oman is diversifying its revenue base, but slowly, and against a background of oil income that remains structurally dominant. The 2025 account does not change that picture; it confirms the trajectory.
Beyond VAT and corporate tax, customs duties reached RO 261 million — above the RO 232 million budgeted — reflecting both trade volumes and Oman’s growing role as a logistics hub. Fees on non-Omani labour licences contributed RO 195 million, a figure that also tracks the pace of economic activity and hiring.
Excise tax was one of the few shortfalls, coming in at RO 84 million against a budget estimate of RO 100 million. Municipality fees, communications licence fees and a handful of other items also fell slightly short. The overall picture, though, was an overperformance.
Non-tax revenue — investment returns, airports and ports income, fines and medical fees — added RO 1.495 billion. Investment revenue alone accounted for RO 805 million of that total, underlining how important the returns from Oman’s state-owned assets and sovereign funds have become to the annual budget.
What the final account shows, in aggregate, is a public finance structure that is broader than it was a decade ago but is still heavily exposed to energy markets. Non-oil revenue sources are no longer marginal — they cover a third of what the government spends. But they are not yet deep enough or diversified enough to insulate the budget from an oil price shock.
That gap is the central fiscal policy question facing Oman over the remainder of the Vision 2040 period. Growing non-oil revenue further will require sustained investment activity, business growth, higher compliance rates and — potentially — decisions about the scope and rate of existing taxes.
For businesses and investors, the picture is mixed in a useful way. Predictability is improving: VAT has settled, corporate tax rates are known, and the regulatory environment is more transparent than it was. The risk is that pressure to meet fiscal targets accelerates changes to that environment faster than the market can absorb.
