MIRA: No distinction made based on scale of business in enforcement of responsibilities

The Maldives Inland Revenue Authority (MIRA) has reiterated that its longstanding policy in carrying out the core responsibilities entrusted to it under the Tax Administration Act is to enforce the law equitably across all entities, regardless of the nature or scale of their businesses.

MIRA issued the statement following remarks made by Maldives Monetary Authority (MMA) Governor Ahmed Munawar during the fifth meeting of Parliament’s Budget Review Committee. On Sunday, the Governor highlighted that collecting Business Profit Tax as a significant responsibility and noted MIRA’s extensive efforts in this area. However, he also stressed the need for MIRA to conduct audits of resorts.

"Based on the data shared with us by MIRA, out of 185 resorts, only about 50 are currently paying income tax. Only about 50 resorts pay income tax. What does this signify? It suggests either a lack of profit or the existence of certain issues," Munawar stated. Consequently, the Governor emphasized that MIRA must audit the resorts.

In its statement outlining its responsibilities, MIRA clarified that its primary mandate under the Tax Administration Act is to enforce tax laws, implement tax policies and manage the collection of all taxes legally due to the state.

The authority further explained that, as part of these responsibilities, it is legally required to monitor whether taxpayers calculate their taxes in accordance with the law and fulfil their tax obligations as prescribed by the relevant statutes.

MIRA emphasized that it has never discriminated between businesses based on their type or size when carrying out these duties, maintaining that its legal responsibilities are discharged equitably. The authority also noted that its operations are guided by a structured strategic plan and a publicly disclosed Compliance Improvement Plan.

The statement further highlighted that entities selected for audits are identified through a Compliance Risk Management framework based on the principle of "risk-based" selection, ensuring a fair process. Under this framework, businesses in the tourism sector and other industries are audited on an equitable basis.

MIRA stated that its operations are designed to improve tax compliance through collaboration with businesses and by providing necessary assistance. Nevertheless, the authority stressed that it continues to take the prescribed action against those who deliberately evade tax payments.