Finance Ministry Arranges Tax Deduction from Unpaid Government Funds

The Ministry of Finance and Government Companies has arranged a mechanism to deduct taxes and other payments owed to the Maldives Inland Revenue Authority (MIRA) from unpaid amounts due to state departments or government-owned companies. MIRA had previously issued guidelines related to this matter, with the main objective of establishing general procedures to be followed by relevant parties to deduct unpaid funds due from state departments or government-owned companies for paying taxes owed to MIRA and other funds, excluding tax deductions. The Ministry stated that if there are unpaid funds due from a state department, when requests for deduction are submitted to MIRA by parties requiring deduction of taxes owed to MIRA, the arrangement for the government to deduct the required payment is now in place. For small, medium and micro enterprises, if the tax amount payable to MIRA on unpaid bills exceeds the amount payable by the government to those entities, after determining the tax amount from the funds payable by the government, the remaining amount will need to be paid to MIRA by the entity as tax. If the tax amount is less than the amount payable by the government, after deducting the required tax, the remaining balance will be paid by the government to those entities. Under the guidelines, requests for fund deduction must be submitted via MiraConnect, or through the MIRA 904 (Application/Refund) form, or via email. Details of the funds to be received must be submitted when making the request. If a request is made to deduct funds due from a state department, MIRA will verify the accuracy of these figures through the Ministry of Finance and Government Companies. If the funds are due from a government-owned company, accuracy will be verified through that company. A company is considered government-owned if it is listed in the list published by the Ministry of Finance. Any refunded funds will be prioritized towards the principal amount, penalties, and interest owed by the entity. No funds will be refunded until they are deposited into MIRA by a state department or government-owned company, and the date of payment will be considered the date on which MIRA receives the funds.