Oman to launch benefits scheme for low-income citizens

The social protection programme is to come into effect next year

Mutrah fish market in Muscat. The Sultan of Oman has announced wide-ranging benefits for low-income Omanis. Victor Besa / The National

Oman's Sultan Haitham has ordered his cabinet to set up cradle-to-grave benefits for low-income Omanis.

The social protection law is intended to assist low-income earners on several fronts, including the provision of child benefits.

Financial assistance will also be provided for pensioners, orphans, widowers and Omanis with disabilities.

Oman Television on Wednesday reported that the social protection law ordered by Sultan Haitham is in motion and the final draft is being prepared.

“The Council of Ministers is finalising a draft, under the instructions of His Majesty Sultan Haitham bin Tareq, to introduce cash handouts under the social protection scheme to be given to widows, child benefits, pensioners who are not earning enough money, as well as orphans, and cash assistance to low-income citizens and people with disabilities,” Oman Television reported.

The government has set aside 400 million rials ($1.1 billion) a year starting from 2024 for the social protection programme.

The programmes will cover various risks to which an insured person might be exposed, such as the potential of decreased ability to earn due to old age, disability, work-related injuries, occupational diseases, sick leave and other cases.

Oman Television did not say how much each recipient under the social protection scheme will be awarded but a government official familiar with the plan said it would be in the range of 100 to 250 Omani rials a month.

“It will vary according to whether the money is handed to orphans, widows, old people or for child benefits. It will be finalised by the second quarter of this year,” the official said.

He added that most of the benefits will go to the main breadwinner of the family under the category of minimum wages, which is set at 350 rials per month, although widowers and divorcees will also benefit.

According to official statistics from the National Centre for Statistics and Information, about 97,000 Omanis fall under the category of minimum income wage earners.

Oman predicted a fiscal deficit of 1.5 billion rials ($3.9bn) in 2022, down about 32 per cent from the previous year. Victor Besa / The National

A draft law introducing income tax on high earners in Oman was passed on Sunday by the country's Shura Council. AFP

Pending approval from the Council of Ministers and a final endorsement from Sultan Haitham, the tax will then become law. AFP

As the levy for wealthier people becomes more of a reality in Oman, citizens at both ends of the pay scale have expressed mixed reactions. AFP

If a tax on income is introduced, the sultanate would be the first GCC country to do so. AFP

Oman began weighing up plans to introduce income tax on high earners two years ago, as part of the finance ministry's 2020-2024 economic scheme and efforts to reduce the fiscal deficit. Unsplash

Plans for an income tax on high earners were mentioned in a bond prospectus published by the ministry in 2020, when the sultanate raised $2 billion in external financing. Silvia Razgova / The National

“If you are disabled and you have lost your job or you're widow with no income or a divorced woman with children, you will get the social protection, too,” he said.

Scheme wins support

The news was welcomed by many Omanis who will see their daily lives benefit from this new social protection programme.

“I earn the minimum wage and this new scheme will be a big help to me since most of my pay goes to property rental. “ Hamood Al Shikeily, who is a car mechanic at a garage in Muscat, told The National.

“The news comes at the right time and I am grateful to the kind gesture of the Sultan.”

A 32-year divorced woman with two children also welcomed the news.

“I am divorced and my ex-husband does not pay me enough for our two young children since he says he has another family to look after. The child benefit under the new social protection scheme will be a lifesaver to us,” Salma Al Hubaisi, who was divorced two years ago, told The National.

Mohammed Al Rubai, a retired financial expert at the Ministry of Social Development, estimated that about 400,000 Omanis stand to benefit from the cash handouts.

A draft law introducing income tax on high earners in Oman was passed last year by the country's Shura Council.

Pending approval of the Council of Ministers and a final endorsement from Sultan Haitham, the tax will then become law.