The government has announced plans to amend the Administrative Taxation Act, aiming to enhance the Maldives Inland Revenue Authority’s (MIRA) powers in collecting both tax and non-tax revenue. Attorney General Ahmed Usham confirmed that the amendment will be introduced later this year in an effort to streamline the recovery of outstanding state dues.
Currently, the state is owed an estimated USD 1.04 billion, which includes fines. Of this amount, USD 456 million is attributed to unpaid tax revenue, while the remaining USD 456 million represents non-tax revenue. MIRA’s expanded authority under the forthcoming amendment is expected to address delays and challenges in the existing recovery process, an issue highlighted by the Attorney General’s Office.
The third amendment to the Administrative Taxation Act, under Article 50, had previously empowered the Attorney General to recover state dues, excluding taxes, after their due date. However, legal reforms are now deemed necessary to expedite the process, and the new amendment will grant MIRA the authority to collect non-tax revenue and initiate recovery actions in line with Sharia law, as was previously practiced.
MIRA has already been granted some powers to recover state dues beyond taxes. These include sending payment notices, publicising the names of defaulters, and withholding services from government agencies. Commissioner General of Taxation Hassan Zareer reiterated that MIRA is actively pursuing efforts to recover outstanding funds owed to the state.
The amendment to the Administrative Taxation Act is expected to have far-reaching implications for both the government and defaulters. By enhancing MIRA’s authority, the government hopes to reduce the backlog of unpaid dues, thereby improving its fiscal position. The introduction of streamlined recovery mechanisms could increase the efficiency of collecting both tax and non-tax revenue, ensuring more timely payments to the state.
On the other hand, businesses and individuals who owe taxes or non-tax revenue may face stricter enforcement measures. With MIRA taking a more active role in pursuing overdue payments, defaulters will likely encounter stronger consequences, such as public exposure and service restrictions, if they fail to settle their debts.
The proposed amendment reflects the government’s broader efforts to address fiscal challenges and strengthen revenue collection as it works to manage public finances more effectively.
