The Maldives Inland Revenue Authority (MIRA) has unveiled an ambitious Compliance Improvement Plan (CIP) for 2025-2026, designed to enhance voluntary compliance, improve revenue collection, and streamline the tax reporting process. The plan outlines targeted initiatives for various taxpayer segments and aims to address systemic challenges in the country’s tax landscape.
Strategic Priorities
The CIP focuses on expanding the tax base, ensuring accurate taxpayer registration, improving timely tax filings and payments, and refining tax reporting accuracy. Through a combination of awareness campaigns, proactive engagement, and enforcement measures, MIRA seeks to simplify compliance for taxpayers while taking a firm stance on non-compliance.
One of the key strategies includes identifying and registering previously unregistered taxpayers, such as online businesses, expatriates, and professional service providers. Simultaneously, a GST deregistration programme will remove inactive taxpayers to maintain an accurate registry.
To address challenges in on-time filing and payment rates, MIRA plans to monitor high-risk taxpayers, conduct awareness sessions, and implement fast-track assessments for recovering unreported taxes. Enforcement actions such as freezing bank accounts and pursuing civil litigation will be deployed against persistent non-compliance.
Sector-Specific Risks
The plan identifies critical risks in several industries and proposes tailored solutions:
- Tourist Resorts and Multinational Enterprises (MNEs): With tax contributions lagging behind industry growth, MIRA will address issues like profit shifting and improper record-keeping through audits, awareness sessions, and specific guidance.
- Guesthouses and Hotels: Efforts will focus on curbing revenue underreporting and poor record-keeping by conducting targeted inspections and collaborating with other ministries.
- Construction and Real Estate: Tax revenue from this sector has declined despite growth in imports and expenses. Industry-specific guides and stakeholder consultations are among the proposed interventions.
- Food Services and Retail Trade: These sectors face issues with overstated costs and misclassified expenditures. The plan includes monitoring high-risk businesses and conducting audits to ensure compliance.
- Transport Services and High-Net-Worth Individuals (HNWIs): Enhanced frameworks will target compliance gaps through stakeholder engagement, tailored audits, and legislative revisions.
Technological Advancements
MIRA’s CIP also highlights plans for modernisation, including enhanced data management and automation. The introduction of e-invoicing aims to create a seamless tax system, reducing administrative burdens and improving taxpayer experiences.
A Dynamic Approach
MIRA’s compliance improvement plan represents a holistic approach to addressing tax challenges in the Maldives. By combining sector-specific interventions with systemic reforms, the authority aims to foster a culture of compliance and strengthen revenue collection for the country’s development.
The plan will be executed over two years, with flexibility to adapt strategies as new challenges arise.