Income tax bill presented to Parliament

A bill regarding income tax has been presented to the Parliament today. 

The income tax bill by the government was presented by Ungoofaaru MP Mohamed Waheed. 

The first reading of the bill was carried out at the Parliament today. The proposed bill suggests taking a tax on the income of individuals who earn more than MVR 40,000 and establishing a progressive tax system in the country. A progressive tax system would see taxes levied on citizens based on the range of their income. 

Finance Ministry had previously stated that it aimed to start taking income tax starting from next year. It has also estimated that the income tax will yield around MVR 600 million from an estimated 6000 individuals to the government per annum. The Ministry previously stated that income tax will be taken from three brackets.

THE TAX BRACKETS:

• Income MVR 0 – MVR 40,000: nil
• Income MVR 40,000 – MVR 60,000: 8 percent
• Income MVR 60,000 – MVR 100,000: 10 percent
• Income MVR 100,000 plus: 15 percent

The income tax bill is proposed to reduce the wage disparities in the country, stop unjust enrichment and refine the national tax system. The income tax will apply to both local citizens as well as expatriate workers.