docfiles.Maldives_Inland_Revenue_Authority Maven / Gradle / Ivy

Go to download
The Maldives Inland Revenue Authority (MIRA) is a fully autonomous body responsible for tax administration in the Maldives. MIRA collected 76.5% of the total revenue collected by the Government of Maldives in 2013.[2] The main responsibilities of MIRA include execution of tax laws, implementation of tax policies and providing technical advice to the Government in determining tax policies. The Tax Administration Act[3] stipulates the other responsibilities of MIRA.MIRA was established on 2 August 2010 as a separate and independent legal entity. Following the establishment of MIRA, a modern tax system was introduced to the Maldives via the Tourism Goods and Services Tax Act in January 2011 and the Business Profit Tax Act in July 2011. The Tourism Goods and Services Tax Act was replaced by the Goods and Services Tax Act in October 2011.MIRA administers a number of laws and regulations. In addition to the administration of tax laws, MIRA also collects a number of fees and levies.The Tourism Goods and Services Tax (T-GST) Act[4] came into effect on 1 January 2011. Under the Act, T-GST is charged on the value of goods and services supplied by tourist resorts, tourist hotels, guest houses, picnic islands and tourist vessels, and on certain other services supplied by places providing services to tourists in the Maldives. The tax rate under the Act was 3.5%. The T-GST Act was abolished following the commencement of the Goods and Services Tax Act.In October 2011, the T-GST regime was repealed and replaced by the Goods and Services Tax (GST) Act.[5] The GST Act came into effect on 2 October 2011, and expanded the tax to all sectors of the economy. The Act imposed a GST at the rate of 3.5% from 2 October 2011 to 31 December 2011 and 6% from 1 January 2012 to 31 December 2012. The GST rate on “tourism goods and services” increased to 8% on 1 January 2013 and to 12% on 1 November 2014.The GST rate on "general" goods and services remain at 6% from 1 January 2012.The Business Profit Tax (BPT) Act[6] came into effect on 18 July 2011. Under the Act, tax is imposed at the rate of 15% on profits exceeding MVR 500,000 (approx. USD 32,425) in a tax year. A lower rate of 5% is applicable to companies resident in the Maldives generating all of their income from outside the Maldives. Further, if any payment specified in Section 6 of the Act is made by a business to a non-resident, a withholding tax at the rate of 10% is imposed on the gross amount of such payment.MIRA enforces two major revenues under The Maldives Tourism Act:[7] • Tourism “Bed” Tax: The bed tax is levied at a flat rate of USD 8 per tourist per night. Tourist establishments are responsible for collecting the tax from each tourist. The bed tax is set to be abolished from 1 December 2014.Tourist resorts and hotels (if build on land owned by the Government) are required to pay land rent at the rate of USD 8 per square meter, subject to the caps and floors specified in the Act.Banks operating in the Maldives are required to pay 25% of taxable profit as Bank Profit Tax.[8] Banks are exempt from paying Business Profit Tax.Maldivians and foreigners departing abroad from an international airport in the Maldives are required to pay an Airport Service Charge[9][10] of USD 12 and USD 25 respectively.Members of the Board of Directors of MIRA are appointed by the President with the approval of the People’s Majlis. The Board is responsible for determining the administrative policies of the MIRA.The Board consists of 7 members, including the Commissioner General of Taxation and Deputy Commissioner General of Taxation. The term of the Board is 5 years. Members currently serving on the Board are:[11]Mr. Abbas Adil Riza served on the Board from 2 August 2010 to 22 January 2012, after which he was replaced by Mr. Ahmed Faiz Mohamed.In 2011, MIRA collected MVR 4.6 billion in revenue, which is 89% higher than the collection in 2010 (by the former Department of Inland Revenue and MIRA) – the newly introduced taxes explain the increase. In 2012, MIRA collected MVR 7.2 billion (approx. USD 466.9 million), which is an increase of 57% compared to 2011. In 2013, MIRA collected MVR 8.9 billion (approx. USD 580.1 million), which is an increase of 24% compared to 2012.Table 1 –Total revenue collection from 2010 to 2014 (in MVR billion)