Maldives government allows tax payments to be offset against state dues

The Maldivian government has introduced a mechanism to offset tax payments owed to the Maldives Inland Revenue Authority (MIRA) against funds owed by state institutions to businesses and individuals. In a joint press release issued today, the Ministry of Finance and the Ministry of Public Enterprises announced that if a state institution owes money to a party, arrangements are now in place for the government to offset such debts against taxes payable to MIRA, upon submission by the relevant party to MIRA. Priority is being given to small and medium-sized businesses under this procedure. The statement said that among the bills submitted by these businesses to government institutions, those for which payment has not yet been made will be given priority under this arrangement. Explaining how the offsetting process will work, the ministries stated that in cases where the amount of tax payable to MIRA exceeds the amount the government owes to that party, the tax amount can be deducted from the payment the government is required to make. The remaining balance must then be paid by the party to MIRA as tax. Additionally, if the tax amount payable to MIRA by these businesses is less than the amount the government owes them, the agreed-upon amount for tax will be deducted from the payment the government is required to make, and the remaining funds will be paid by the government to that party. The Ministry of Finance and the Ministry of Public Enterprises further stated that when requesting deduction of funds payable to MIRA under this arrangement, applications should be submitted along with full details of the funds, following the procedure determined by the respective institution.