Parliament has begun the debate for the bill regarding increasing the Non-resident Withholding Tax (NWT) from 5 percent to 10 percent.
Mathiveri Constituency MP Hassan Zareer submitted the bill to amend the Income Tax Act on behalf of the government, which reads that the purpose of the bill is to create an equal environment for local contractors when competing against foreign contractors for Maldivian construction projects.
The bill estimates that the amendment will see an yearly MVR 251 million increase to state revenue.
The NWT is a form of tax outside of the payment made when a Maldivian business pays for a foreign contractor. The Maldivian company will be making said payment to the Maldives Inland Revenue Authority (MIRA).
The bill proposes an amendment to Article 55 of the Income Tax Act in bringing about an increase to the tax from 5 percent to 10 percent, along with amendments to the relevant articles.
In the debate held during today's Parliament sitting, majority People's National Congress (PNC) MPs stated that the amendment to the act would see Maldivian contractors gain more opportunities in competing for projects and create equal opportunities when competing against foreign contractors.
"The amendments in the bill will bring an end to the benefits being gained by foreign businesses and assure the rights of Maldivian businessmen," said Zareer.
In response to PNC's statements, Maldivian Democratic Party (MDP) MPs said that even though they back the increase to the NWT, Maldivian businesses will not see any benefits.
"They are right. We need to cooperate when there is an opportunity for Maldivians. We are ready to cooperate. Even so, today we are talking about the NWT. This tax does not relate to Maldivians," said Vaikradhoo Constituency MP Hussain Ziyad (Fittey).
South Hulhumale' Constituency MP Dr. Ahmed Shamheed said that even though the Maldivian construction industry has been growing for a long time, the industry has been "destroyed" since the current government took office.
"Honorable Speaker, the small projects worth MVR 4 million, MVR 5 million from councils are being awarded to foreign contractors. So I do not see how increasing the tax from 5 percent to 10 percent would bring about more opportunities for Maldivians," said Shamheed.
During the debate, MDP MPs criticized and accused the government for awarding most of the government's projects to foreign companies.
