Finance Ministry Clarifies Tax Deduction Process for Government Debt to Businesses

The Ministry of Finance has issued a statement clarifying that arrangements are in place to deduct taxes after deducting debts owed by the government to businesses. The statement, released yesterday, initially mentioned that this process would apply to money due from state departments or companies in which the government holds shares. However, a revised version omitted the reference to government-owned companies. According to the Ministry, requests for tax deductions must follow procedures determined by the Maldives Inland Revenue Authority (MIRA). Under these procedures, taxes can be paid after deducting any money due from state departments or government-owned companies. Other payments such as taxes and fines payable to MIRA can also be deducted under the same procedure. Crucially, no money can be deducted unless the unpaid amount for the business is deposited with MIRA by the government department or company. This means that while business owners may submit requests to deduct taxes, the process will only proceed when the government deposits the owed money with MIRA. Clearing government debts to business owners has been a major promise of President Mohamed Muizzu. He had given six deadlines before the People's Majlis elections and local council elections, but the money has not yet been cleared.