Arrangements have been made to allow any money owed to a party by a state institution that remains unpaid to be set off against taxes payable to the Maldives Inland Revenue Authority (MIRA).
In a statement issued by the Ministry of Finance, it said that arrangements are now in place so that when parties wishing to set off money owed to them by a state institution against taxes payable to MIRA submit their request to MIRA, the money owed by the government will be set off.
Under this arrangement, special rules have been established for pending, unpaid bills submitted by micro, small, and medium-sized enterprises (MSMEs). Accordingly:
- If the tax money payable to MIRA by those businesses exceeds the amount owed to them by the government, after setting off the tax money against the money owed by the government, the remaining amount must be paid by that party to MIRA as tax.
- If the tax money payable to MIRA is less than the amount owed to them by the government, after setting off the money owed by the government against the money payable as tax, the remaining amount will be paid by the government to that party.
When submitting a request to set off money payable to MIRA, the Ministry of Finance requested that the request be submitted along with details of that money in accordance with the rules established by the authority.
President Dr. Mohamed Muizzu announced last December that a mechanism would be established enabling taxes to be deducted from money owed by the government, in order to resolve the issue where companies were required to pay taxes to MIRA even while payments owed to them by the government were delayed.
The President made that decision after several business owners raised complaints during a meeting held with small and medium enterprise owners at the Social Centre, stating that while payments due from government projects were delayed, MIRA was taking action to collect taxes owed to the authority.
