The Maldives Inland Revenue Authority (MIRA) has released its Quarterly Employee Withholding Tax (EWT) report for the fourth quarter of 2024 (24Q4), shedding light on how much tax was collected from employees across various industries. While EWT plays a significant role in the country’s taxation system, many people may not fully understand what it is and how it works.
What is Employee Withholding Tax (EWT)?
Employee Withholding Tax is the tax deducted directly from an employee’s salary by their employer before the payment is made. This tax is applied to individuals earning more than MVR 60,000 per year or MVR 60,000 in any given month. Introduced on 1 April 2020 under the Income Tax Act (25/2019), the system ensures that income tax is collected regularly rather than being paid in a lump sum at the end of the year.
Employers must register all employees earning above MVR 30,000 per month, but only those earning above MVR 60,000 per month are subject to EWT.
How Much Tax is Deducted?
The amount of tax deducted depends on how much an employee earns per month, as outlined in the tax brackets:
- MVR 60,000 – 100,000 → 5.5% tax
- MVR 100,000 – 150,000 → 8% tax
- MVR 150,000 – 200,000 → 12% tax
- MVR 200,000+ → 15% tax
Employers must submit EWT tax returns to MIRA and make the necessary payments. Companies operating in Maldivian Rufiyaa (MVR) can choose to pay in MVR or USD, while those using a foreign currency must report and pay in USD.
Who is Paying the Most EWT?
For the fourth quarter of 2024, the Maldives collected MVR 63.1 million in EWT, with private companies contributing 91% of the total tax revenue. The tourism sector alone accounted for MVR 33.9 million (54%), making it the largest contributor.
Other key sectors that contributed to EWT include:
- Wholesale & Retail Trade – MVR 9.98 million
- Professional, Scientific & Technical Services – MVR 4.17 million
- Information & Communication – MVR 2.7 million
- Construction – MVR 2.5 million
Maldivians vs Expatriates in EWT Contributions
A total of 19,868 employees from 134 different countries were registered for EWT. The tax was nearly evenly split between Maldivian and expatriate employees:
- Maldivians paid MVR 32.6 million (49.68%)
- Expatriates paid MVR 33 million (50.32%)
Despite the high number of foreign employees in the tourism and construction sectors, Maldivians still accounted for a significant share of tax payments, reflecting high salaries in certain professions.
Who Are the Highest Taxed Professionals?
The highest contributions to EWT come from professionals in management, aviation, healthcare, and finance. The top professions paying the most tax include:
- Management & Organisation Analysts – MVR 15.2 million
- Pilots – MVR 6.8 million
- General Management Professionals – MVR 6.4 million
- Doctors, Finance Managers & Engineers also made significant contributions.
Why This Matters
EWT is a major revenue source for the Maldivian government, funding essential public services and infrastructure projects. Understanding how it works helps employees and businesses ensure compliance and avoid penalties.
For employees, EWT simplifies tax obligations as their income tax is deducted before they receive their salary. For employers, timely tax submission is mandatory, with penalties applied for late payments or under-reporting.
As the Maldivian economy grows, EWT data also provides valuable insights into workforce trends, salary distributions, and tax contributions across industries. With the tourism sector remaining the dominant contributor, future policy decisions may focus on diversifying revenue sources.
