Government introduces tax offset mechanism for businesses owed payments

Finance Ministry has introduced a mechanism allowing businesses to offset outstanding payments owed to them by the state against their tax liabilities to the Maldives Inland Revenue Authority (MIRA).

In an official announcement, the Ministry said businesses with overdue payments from government agencies or state-owned enterprises can now request to have these amounts reconciled against their outstanding tax obligations. Businesses seeking to use this arrangement must submit their applications to MIRA.

Regarding Micro, Small and Medium Enterprises (MSMEs), the Ministry clarified that where a business’s outstanding tax liability exceeds the amount owed to it by the government, the government’s debt will be deducted from the tax liability, and the business must pay the remaining balance to MIRA.

Conversely, if the amount owed by the government exceeds the business’s tax liability, the outstanding tax will be deducted from the government’s debt, and the state will pay the remaining amount to the business.

The Ministry has requested that all applications for such offsets be submitted to MIRA, accompanied by comprehensive details of the relevant payments and in accordance with the procedures established by the authority.