Finance Ministry Enables Tax Offsetting for Government Debt to Businesses

The Ministry of Finance has introduced a mechanism to allow businesses to offset taxes owed to the Maldives Inland Revenue Authority (MIRA) against unpaid dues from government departments and state-owned companies. Under the new arrangement, if a government entity owes money to a business, the tax payable by that business to MIRA can be deducted from the government’s outstanding payment. For micro, small, and medium enterprises (MSMEs), if the tax owed to MIRA exceeds the government debt, the business must pay the difference to MIRA. Conversely, if the government debt is larger than the tax due, the government will pay the remaining balance to the business. The ministry has instructed that requests for such offsets be submitted following departmental procedures with full details of the amounts involved.