President Dr. Mohamed Muizzu has ratified the bill regarding increasing the Non-resident Withholding Tax (NWT), a form of tax outside of the payment made when a Maldivian business pays for a foreign contractor, from 5 percent to 10 percent.

The President ratified the bill during today's ceremony held at the President's Office, along with six other bills.

While detailing the reason why the acts needed to be put into force after the bills were ratified, President Muizzu said that increasing the Withholding Tax will serve as a form of major progress for Maldivian construction companies.

"Because of this amendment to the Withholding Tax, foreign companies will not receive any additional and certain advantages when procuring contracts. Maldivian companies and foreign companies will be competitive now," said the President.

According to President Muizzu, if this is not done, it will be easier for foreign companies to procure contracts.

The bill, submitted by Mathiveri MP Hassan Zareer, passed with 54 votes in favour and two against.

According to the bill's introduction, the amendment aims to create a level playing field for local contractors competing with foreign contractors for construction projects in the Maldives.

The bill estimates that the increase will generate an additional MVR 251 million in annual state revenue.

Withholding tax is levied on payments made by Maldivian businesses to non-resident contractors. The tax is withheld by the business making the payment and paid to the Maldives Inland Revenue Authority (MIRA).

The bill amends Article 55 of the Income Tax Act to increase the withholding tax rate from 5 percent to 10 percent, along with related provisions.