Maldives gov't proposes stricter tax appeal rules, requiring 50% payment upfront

The Maldivian government has proposed an amendment to the Administrative Law regarding tax collection that would require taxpayers to pay 50% of the tax ordered to be paid before they can file an appeal with the Tax Appeal Tribunal, up from the current 25%. The amendment, submitted to the People's Majlis by PNC member Mohammed Hamdun from the Fuvahmulah constituency on behalf of the government, was accepted with the support of 74 members and sent to a committee for study, with 11 members voting against it. Under the current law, a decision made by the Maldives Inland Revenue Authority (MIRA) after auditing a taxpayer's accounts or conducting an investigation can be appealed to the Tribunal only after paying 25% of the tax ordered to be paid. The proposed amendment increases this to 50% and, in some cases, requires the full amount to be paid. The bill outlines four situations where a taxpayer must clear 100% of the tax ordered before appealing. These include transactions specified in Article 66 of the Income Tax Act, relating to penalties for late payment; Article 67 transactions, involving penalties determined by the Commissioner when the offense amount is not specified; transactions involving the supply of goods or services to related parties under the Goods and Services Tax Act; and transactions specified in paragraph (c) number 5 of Article 19 of the Goods and Services Tax Act, related to taxation of goods sold and services provided to parties other than related parties. The bill states that the 50% and 100% calculations will be based on the tax amount determined by MIRA, excluding penalties or interest related to the appealed amount. The amendment will take effect from the date the Majlis passes and ratifies it. Rules to be made in connection with the amendment must be drafted within three months of its implementation.