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No remittance tax in 2020: MIRA

Ahmed Aiham
25 December 2019, MVT 09:32
Maldives' government decided to repeal the Remittance Tax through the newly ratified Income Tax. PHOTO: HUSSAIN WAHEED / MIHAARU
Ahmed Aiham
25 December 2019, MVT 09:32

Maldives Inland Revenue Authority (MIRA) on Tuesday, revealed its decision to repeal the remittance tax beginning January 1, 2020.

According to a circular released by MIRA, The tax is part of the repealed acts declared in the recently ratified 'Income Tax'.

The institution also requested financial institutions to submit its remittance tax returns for December 2019 and pay taxes to MIRA by January 15, 2020.

Banks and money transfer agencies are responsible for collecting the tax from foreigners at the point of remittance.

Introduced in 2016 to public scrutiny, remittance tax charges three percent from the amount remitted abroad by expatriates in Maldives. The tax is levied on the person transferring money abroad.

Although the state will commence collection of the income tax on January 1, 2020, the income tax imposed on salary, business profits, revenue generated by leasing movable and immovable assets, dividend, interest, annuity, pension and retirement benefits, salary earned by beneficiaries, technical service fee, commissions and royalties, will be collected starting from April 1.

When first submitted to the parliament, the bill proposed to impose tax on monthly earnings that were MVR 40,000 or higher. Following amendments, income tax will be collected from individuals earning a monthly salary of MVR 60,000 and above.

Charging income tax was one of the pledges of President Ibrahim Mohamed Solih during his election campaign in 2018.

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