Maldives Tax Newsletter – November 2024
Welcome to our first edition of the Maldives Tax Newsletter. In this edition of the newsletter, you will find highlights from national developments in tax law and policy.
Tax news
Maldives Inland Revenue Authority (MIRA) Amends Enforcement Policies
On 20 October, MIRA tightened its rules on enforcement actions against non-filers and non-payers through its newly published amendments to its enforcement policies:
First Amendment to General Enforcement Policy
Third Amendment to Name and Shame Policy
First Amendment to the Policy on Accessing Bank Account Information and Freezing Bank Account
You can read more about it on our blog here.
MIRA Publishes New Regulation
On 28 October, MIRA published its Regulation on Submission of Information to MIRA by Developers and Investors of Special Economic Zones. It sets out reporting obligations that facilitate the determination of tax expenditure for incentives given under the Special Economic Zone Act.
Ministry of Finance Publishes the Medium Term Fiscal Strategy 2025-27
On 30 October, the Ministry of Finance published its Medium Term Fiscal Strategy 2025-27 which sets out its strategy for managing fiscal risks and enhancing public finance and debt sustainability. It highlights the following:
Tax revenue has not been growing at the same pace as the nominal GDP due to low tax compliance and high tax arrears.
Revenue policy changes for 2024 include changing the rates for departure taxes and airport development fees, reviewing import duty rates of products that pose health risks, introducing a dredging fee and changing green tax rates.
A review of the Goods and Services Act and a subsequent broadening of the tax base has been planned for 2025.
High tax arrears pose a threat to Maldives’ macro-fiscal stability. Strengthening enforcement actions against non-payers has been planned for 2024 and the following years.
Minister of Finance Presents National Budget 2025
On 31 October, the Minister of Finance presented the national budget for 2025 at the 44th sitting of the 20th People’s Majlis. The Minister of Finance highlighted the following:
The Tax Administration Act is under review and amendments will be made to facilitate an increase in tax compliance.
The government plans to mobilise more revenue by increasing tourism-related taxes and fees which have been planned for late 2024 and 2025. This includes increases in departure tax, airport development fee and tourism sector goods and services tax.
The destination principle is planned to be introduced into the goods and services tax system in mid-2025 so that all goods and services consumed in the Maldives will be subject to goods and services tax.
Tax cases
MIRA v Global Crown Private Limited [273-CVC-2023]
On 17 October, the Civil Court passed its judgement in MIRA v Global Crown Private Limited. The court rejected MIRA’s tax debt recovery claim as the Registrar of Companies had decided to wind up the defendant company.
Conclusion
Thank you for reading our first edition of the newsletter. We hope you found the updates valuable. If you have any questions or would like any further information, please do not hesitate to contact us.
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© 2024 Nadha Nazeer. All rights reserved.
