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State collects upwards of MVR 1 bil from income tax: MIRA

Mariyam Malsa
14 June 2020, MVT 14:39
Maldives Inland Revenue Authority. PHOTO: HUSSAIN WAHEED / MIHAARU
Mariyam Malsa
14 June 2020, MVT 14:39

Maldives Inland Revenue Authority (MIRA) revealed that the government received MVR 1.1 billion from income tax collection between January and May 2020.

According to MIRA, the figure is MVR 93 million lower than the amount collected the previous year.

The MVR 19.9 million received as income tax revenue this May was noted to be 81 percent or MVR 99 million lower than the amount collected in May 2019.

Severe economic repercussion caused by the ongoing COVID-19 pandemic is likely to have resulted in the considerable decreases in tax revenue.

MIRA estimates that total income tax revenue for 2020 will reach MVR 8.9 billion, which amounts to 48 percent of the initially predicted figure of MVR 17.3 billion.

In order to counteract the financial impact of the COVID-19 pandemic on the local economy, the government introduced a financial stimulus package of MVR 2.5 billion, aiming to prevent the closure of local businesses and job losses.

As part of government's economic recovery plan to minimize the negative financial impact, Bank of Maldives (BML) will push back its loan repayment period by six months, along with a 20 percent discount on repayment amount, while Housing Development Finance Corporation (HDFC) and SME Development Finance Corporation (SDFC) will extend loan repayments by six months. In addition, Maldives central bank will distribute USD 150 million to banks to mitigate the challenges in acquiring US dollars.

In March, the government also pledged to reduce state spending by MVR 1 billion. In this regard, the government had slashed the salaries of all political appointees and heads of state-owned enterprises (SOEs) by 20 percent. The Parliament followed suit, approving a 20 percent cut on their members’ salaries as well.

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