The Edition


Maldives looks to slap expats with remittance tax

Mohamed Visham
21 June 2016, MVT 10:10
Some expats take shelter under a palm tree on a hot day in the capital Male. Government is looking to impose a tax on remittances to raise revenue. MIHAARU PHOTO/MOHAMED SHARUHAAN
Mohamed Visham
21 June 2016, MVT 10:10

Government on Monday proposed an amendment to the labour law to impose a three percent tax on remittances and force remuneration for expatriate workers to be deposited in local banks.

The amendment proposed by Maaduvvaree MP Mohamed Ameeth said the monthly salary and allowances of all expatriate workers with a valid work permit must be deposited to an account in the employees name maintained at a registered bank in the Maldives.

The first reading of the bill was heard at the parliament sitting on Monday said employers found in violation would face a fine of between MVR10,000 and MVR50,000.

Relevant government authorities would also be afforded the authority to deny services to firms and employers if found in violation. The amendment if passed by the government controlled parliament would also mandate a salary allowance regulation for expats.

The economic ministry would also be given the right to charge a fee from employment agencies.

The ruling party lawmaker Ameeth said the amendment would protect expats and allow authorities to penalise employers with repeated violations.

The proposed amendment comes a week after the central bank revealed that the income remitted out of the Maldives by expatriates last year amounted to USD 363 million (MVR 5.5 billion).

According to MMA’s recently publicised official statistics, USD 363 million had been remitted via money transfer offices, banks and unofficial procedures.

Maldives Immigration’s statistics indicate that over 100,000 expatriates currently work in the Maldives with an estimated 20,000 undocumented workers.

The tax, among a host of new revenue raising measures proposed in the 2016 budget, is expected to raise MVR56 million this year.