Parliament accepts bill on amendments to Tax Administration Act

Parliament has today accepted the bill on amendments to the Tax Administration Act, which grants increased authority to MIRA to enforce stricter penalties on tax evasion.

The bill was submitted to parliament by Vilimale' MP Mohamed Ismail on behalf of the government. The purpose of the bill is stated as reviewing MIRA's powers to recover unpaid taxes and to set stricter penalties for those who fail to pay taxes.

The bill was accepted in today's sitting through the unanimous votes of all 60 MPs who participated in the vote.

Once the bill was passed, the Speaker forwarded the bill for review to the Parliament's Economic Committee.

The bill increases the penalty for offences committed with intention of tax evasion from a house arrest of between three months to one year to a prison sentence of between three months and two years.

Further, failure to pay taxes within the set period now results in a 6 month prison sentence and fine of up to MVR 250,000 as opposed to the earlier penalty of 6 months' house arrest.

The penalty rate has also been increased from 0.05 percent to 0.1 percent of the unpaid amount, effective from the date the taxes are due.

The bill also proposes changes to policy on submitting appeals to the Tax Appeal Tribunal regarding taxes owed. As the bill stands, appeals can only be submitted after 25 percent of the objected amount is paid in full to MIRA.

The bill also grants additional authority to MIRA to take action against those who fail to pay taxes. They can effect halts of services from government institutions, review bank accounts and recovery the taxes from third parties or through a foreign country.

It also addresses challenges faced in delivering notices from MIRA, now declaring that notices will be considered delivered once it is sent to the address or email account provided to MIRA.