MVR 1 billion in revenue held up due to court process: Zareer

About MVR 1 billion owed to the state remains unrecovered because it is tied up in court proceedings, the commissioner general of taxation, Hassan Zareer said today.

Speaking before parliament’s budget review committee, Zareer said it can take up to 10 years for a single tax case to move from the Tax Appeal Tribunal to the Supreme Court, leaving large sums effectively frozen.

“The money due during that period is blocked,” he said.

Zareer noted that the Maldives Inland Revenue Authority (MIRA) is currently handling around 200 tax cases with only five lawyers. In the past, he said, external experts could appear in court on behalf of the authority, but that option is no longer available.

“You can’t retain good lawyers. If you work for MIRA, you can’t do any other legal work,” he said.

“At tribunal level, you can’t handle a tax case elsewhere, even in the EU unless you have a master’s degree in taxation.”

He added that while judges hearing tax cases in other jurisdictions are required to have specialized qualifications, no such requirement exists in the Maldives.

“Because judgments come based on taxation policies, the whole process of MIRA is affected. Tax is a separate profession. Both judges and those handling cases in the tribunal have to understand tax law,” he said.

MIRA collects about 85 percent of state revenue.

As of September last year, the authority had MVR 13 billion in outstanding dues, the largest portion of it being unpaid resort rent totaling about MVR 5 billion.