Tax evasion penalties to increase, with greater powers to be given for enforcement

The Maldives Inland Revenue Authority (MIRA) is set to receive greater authority in enforcing penalties upon tax evasion cases, with amendments being made to the Income Tax Act.

On behalf of the government, Vilimale' constituency Mohamed Ismail put forth a bill to the Parliament, requesting to review the authority MIRA is to gain in terms of acquiring tax payments, along with increasing the penalties related to tax related crimes.

The bill states that if any sort of tax evasion that is tied to any sort of law occurs, the sentence for such an act is to be increased from a house arrest term of three months to a year, to jail time spanning three months to two years.

The bill also proposes an amendment to the law, stating that if a party fails to pay their tax within the specified timeframe, a criminal penalty of house arrest up to six months with a MVR 250,000 fine is to be set, along with jail time totaling six months as well.

Along with that, a two-fold increase in the 0.05 percent penalty that begins upon the crossing of the deadline of tax payment is also listed in the bill, with the percentage penalty being incurred daily. A 0.1 percent penalty for the unpaid amount is also proposed in the bill.

The bill also lists changes to the chapter of filing an appeal when approaching the Tax Appeal Tribunal, concerning payable tax to MIRA. Thus, the bill states that an appeal can be filed with the tribunal only after payment of at least 25 percent of the amount that has been objected to has been paid to MIRA and confirmed.

Amendments to the law have also been outlined to give MIRA more control over steps that would be taken when it comes acquiring tax payments from tax evaders.

The following is also listed when speaking of the power changes that MIRA is set to receive:

- Seizure of services provided by public companies.

- Acquisition of plots and property.

- Checking bank account details.

- Recovery of money from third parties as well as recover the money through a foreign country or region.

The amendment also addresses the current difficulties in serving notices sent by MIRA. The new amendment states that the notice or document shall be deemed to have been sent to the sender from the date of sending it to the address or email address given to MIRA.