Deputy Speaker Ahmed Nazim presides over a sitting of the Parliament. (Photo/People's Majlis)
Parliament’s Deputy Speaker Ahmed Nazim, on Wednesday, alleged that heads of institutions were accumulating wealth through illicit means and extending these illegal gains to their family members.
During Wednesday’s parliamentary debate on the proposed amendment to the Tax Administration Act—which seeks to increase fines and introduce prison terms for tax evasion—Nazim said he has witnessed the government granting significant concessions in the past days, specifically highlighting the postponement of the payment of around MVR 9 billion due in unpaid tax-related fines and fines for island leases.
He underscored that the former administration had also postponed payment of unpaid fines resulting from non-payment of rent for islands to support economic growth and ensure the continued development of resorts on those islands. However, he stressed that these actions lacked a clear and transparent policy framework.
“The committee incepted to grant compensation included a few officials from the President’s Office, and there have been instances where [fines] have been forgiven or granted concessions based on where their interests lie,” he said.
According to Nazim, the proposed amendment would allow for such matters to proceed more transparently.
“At present, we are witnessing heads of institutions and individuals holding independent positions accumulate wealth through illicit means, cover these illegal gains and extend it to their family members,” he added.
Nazim said the amendment would clarify how taxpayers should file their tax returns and what should be included in their tax statements.
The government-backed amendment to Tax Administration Act sponsored by PNC’s Vilimale’ MP Mohamed Ismail is aimed at empowering Maldives Inland Revenue Authority (MIRA) to determine the amount of tax payable in cases where taxpayers fail to file returns and revise tax-related offenses and penalties as well as the powers vested in MIRA to recover outstanding tax payments.
In this regard, the bill states that it will be considered tax evasion if it is proven that a taxpayer deliberately included false information in a tax statement, omitted relevant details, or provided inaccurate financial data.
It will also be considered tax evasion if a taxpayer fails to submit tax returns as required by law and does not cooperate with the Commissioner General of Taxation on the matter.
At present, the penalty for failing to submit tax returns is home confinement for a period ranging from one to six months. However, the proposed amendment introduces significantly tougher punishments, replacing home confinement with a prison sentence of one to six months, along with a fine of up to MVR 250,000.
The current law imposes a fine of 0.05 percent per day of the outstanding tax amount for failing to pay taxes by the due date. The proposed amendment increases this penalty to 0.1 percent per day.