Unpaid Taxes Worth MVR 7.7 Billion Could Derail State Finances, Warns Finance Ministry

The Ministry of Finance warned that unpaid taxes and resort land rent arrears totaling MVR 7.7 billion (28% increase year-on-year) pose a significant risk to state finances. Two-thirds of the outstanding is from resort rents. The compliance decline was attributed to concessions made by the Maldives Inland Revenue Authority (MIRA) during the COVID-19 pandemic, including deferred payments and paused enforcement. Despite MIRA resuming normal enforcement, compliance remains low. The Ministry stated that if non-compliance continues, the state may miss revenue targets and need additional debt. The budget report details breakdowns: income tax MVR 536.8M (+106%), TGST MVR 972.9M (+71%), GGST MVR 1.6B (+48%), other taxes MVR 920M (+3%), resort rents MVR 3.4B (+17%), non-tax revenue MVR 171M (-16%). The Ministry is drafting bills to amend the Tax Administration Act of 2010 to address enforcement challenges.

The Ministry of Finance warned that unpaid taxes and resort land rent arrears totaling MVR 7.7 billion (28% increase year-on-year) pose a significant risk to state finances. Two-thirds of the outstanding is from resort rents. The compliance decline was attributed to concessions made by the Maldives Inland Revenue Authority (MIRA) during the COVID-19 pandemic, including deferred payments and paused enforcement. Despite MIRA resuming normal enforcement, compliance remains low. The Ministry stated that if non-compliance continues, the state may miss revenue targets and need additional debt. The budget report details breakdowns: income tax MVR 536.8M (+106%), TGST MVR 972.9M (+71%), GGST MVR 1.6B (+48%), other taxes MVR 920M (+3%), resort rents MVR 3.4B (+17%), non-tax revenue MVR 171M (-16%). The Ministry is drafting bills to amend the Tax Administration Act of 2010 to address enforcement challenges.

The Ministry of Finance warned that unpaid taxes and resort land rent arrears totaling MVR 7.7 billion (28% increase year-on-year) pose a significant risk to state finances. Two-thirds of the outstanding is from resort rents. The compliance decline was attributed to concessions made by the Maldives Inland Revenue Authority (MIRA) during the COVID-19 pandemic, including deferred payments and paused enforcement. Despite MIRA resuming normal enforcement, compliance remains low. The Ministry stated that if non-compliance continues, the state may miss revenue targets and need additional debt. The budget report details breakdowns: income tax MVR 536.8M (+106%), TGST MVR 972.9M (+71%), GGST MVR 1.6B (+48%), other taxes MVR 920M (+3%), resort rents MVR 3.4B (+17%), non-tax revenue MVR 171M (-16%). The Ministry is drafting bills to amend the Tax Administration Act of 2010 to address enforcement challenges.

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