Auditor General: Rise in unpaid taxes due to govt’s failure to settle dues

Auditor General Hussain Niyazy, on Tuesday, stated that the amount of unpaid taxes owed to the state is increasing each year, attributing the fact to the government’s failure to settle outstanding payments owed to private companies.

Speaking at a meeting of the parliamentary committee reviewing the proposed state budget for next year, Niyazy highlighted that records show approximately MVR 22 billion in taxes remain unpaid. Citing the Maldives Inland Revenue Authority (MIRA), he noted that a key reason for this is the government’s failure to pay companies contracted to carry out various government projects and provide services.

Niyazy further pointed out that although a significant portion of the payments owed to companies remains outstanding, the proposed budget for next year does not include allocations to settle these bills. He emphasized the importance of the Finance Ministry identifying mechanisms to fulfil these financial obligations.

While several repayment methods have been proposed, Niyazy urged committee members to seek clarification from the government on its specific strategy for settling the outstanding debts.

With government arrears owed to companies currently estimated at MVR 7 billion, the administration introduced a mechanism on the first of this month allowing companies to offset their tax liabilities against payments owed to them by state institutions.

Finance Ministry has instructed companies wishing to use this mechanism to submit detailed information on their outstanding payments in accordance with procedures established by MIRA.

The policy allowing taxes to be deducted from payments owed by the government was initially announced by President Dr. Mohamed Muizzu in December last year.