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    • DOI: 10.18178/JOEBM
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HOME > Archive > 2026 > Volume 14 Number 3 (2026) >
JOEBM 2026 Vol.14(3): 137-140
DOI: 10.18178/joebm.2026.14.3.924

An Estimation of Laffer Curve in the Sultanate of Oman. Does Oman have an Optimal Total Tax Rate?

Abdusalam Faraj Yahia
Abdusalam Faraj Yahia
Department of Economics, Faculty of Economics, University of Elmergib, Al-Khums, Libya
Email: afyahia@elmergib.edu.ly

Manuscript received February 11, 2026; accepted April 2, 2026; published July 11, 2026.

Abstract—This paper aims to estimate the existence, shape of a Laffer curve and to examine the impact of the Total Tax and Contribution Rate (TTCR) on Total Tax Revenue (TTR) in the Omani economy over the period 2007–2024. Standard theoretical constructs are employed, modeling corporate tax revenue as a quadratic function of the TTCR. Empirical results, derived from non-linear regression analysis, indicate that the quadratic term of the tax rate is statistically significant and correctly signed, confirming the existence of a bell-shaped Laffer Curve in the Omani context. The findings show that when the tax rate is below 25.9%, there is a positive and significant relationship between tax rates and tax revenue. However, when the rate exceeds 25.9%, the relationship turns negative, suggesting that higher rates beyond this point reduce revenue. These results imply that during the period 2014–2018, Oman was operating on the right side of the Laffer Curve, and could have achieved higher tax revenues with lower tax rates. Therefore, it is recommended that policymakers reform the tax system by gradually adjusting corporate tax rates to align with the identified optimal level. To enhance competitiveness within the Gulf Cooperation Council (GCC) region, the study suggests that the optimal tax rate for maximizing corporate tax revenue in Oman should not exceed 25.9%. Finally, the estimated Laffer Curve may serve as a practical tool for fiscal and budgetary planning, offering policymakers a framework to optimize revenue while supporting private sector growth.
 
Keywords—tax rate, tax revenue, Laffer curve, quadratic function, sultanate of Oman

Cite: Abdusalam Faraj Yahia , "An Estimation of Laffer Curve in the Sultanate of Oman. Does Oman have an Optimal Total Tax Rate?," Journal of Economics, Business and Management, vol. 14, no. 3, pp. 137-140, 2026.

Copyright © 2026 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

 
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