Tag: MIRA

Police looking for man who stole money from MIRA office

The Maldives Police Service has announced it is searching for a man who stole money from the Maldives Inland Revenue Authority (MIRA) office.

According to police, he stole the money from a service counter at the office on 20 April 2013. The stolen MVR26,000 was kept on the counter by another person who was at the office to pay taxes.

Police have now publicised the CCTV footage of the person at the MIRA office and requested public assistance in identifying and finding the individual.

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MIRA quarterly revenues shows 10.5 percent increase compared with previous year

The Maldives Inland Revenue Authority (MIRA) has released it’s first quarterly report of 2014, revealing that a total revenue of MVR2.78 billion was collected – an increase of 10.5 percent on the corresponding period in 2013.

91.5 percent of revenue was collected from five sources: Goods and Services Tax (GST) – 12.7 percent, Tourism Goods and Services Tax (T-GST) – 31.9 percent, Business Profit Tax – 27.9 percent, Tourism Land Rent – 9.3 percent, Tourism Tax (bed tax) – 5.3 percent, and Airport Service Charge – 4.4 percent.

MIRA noted that increased collection of fines for nonpayment as well as a “significant” rise in Land Sales Tax collected (0.3 percent).

59 percent of the total revenue was collected in US dollars – 29.5% more than the share of the previous quarter’s collection, and 7.7% more than the first quarter of 2013. The rise was driven largely by increased revenue from GST, Airport Service Charge, and Business Profit Tax – which grew by 24.7 , 45.1, and 16.4 percent respectively compared with twelve months ago.

MIRA’ s revenue streams are set to further increase from next month as telecommunications services will be subject to GST for the first time. T-GST is also scheduled to increase from the current rate of 8 to 12 percent in November, although the bed tax will be withdrawn in the same month.

The current government is considering a number of revenue-raising measures in order to address the MVR3.4 billion (US$224 million) shortfall in this year’s record MVR17.95 billion budge.

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MIRA to collect additional MVR110 million from telecoms tax

The Maldives Inland Revenue Authority (MIRA) expects to collect an additional MVR110 million (US$7.1 million) per year from taxes on the the telecommunications sector.

MIRA announced this week that telecommunications services will be subject to Goods and Services Tax (GST) – currently at 6 percent – from May 1.

The move comes as the government continues to introduce new revenue raising measure to address the MVR3.4 billion (US$224 million) shortfall in this year’s record MVR17.95 billion budget.

On Monday (April 14), the People’s Majlis is set to consider amendments to the Import-Export Act which propose raising custom duties on a number of items from the current zero rate to five, 10, and 15 percent or higher.

The items include diesel, sugar, sweets, cotton, rope, carpets, textiles, fur, man-made filaments, ready-made garments, and steel.

This week has also seen MIRA release its March revenue figures, which show an increase of 22 percent compared with the same month last year.

March’s figures were distorted, however, after after February’s GST payment date was extended into March as the deadline fell during a holiday.

The figures show that 54.8 percent of revenue came from GST, which includes Tourism Goods and Services Tax (T-GST) – scheduled to rise from the current 8 to 12 percent in November this year.

Last month’s figures showed a marked improvement on the previous month’s collections after the Majlis’ failure to renew the tourism bed tax in December had resulted in reduced earnings during January (reflected in February’s collections).

After the Finance Minister Abdulla Jihad warned that this loss of income could amount to US$6million month, the decision was made to reintroduce the bed tax – charged at a flat rate of $8 per bed night – until November this year.

Bed tax amounted to over US$4.5 million in March, or 7.1 percent of MIRA’s collected revenue which came to MVR938.2 million. Over 75 percent of March’s income was received in US dollars.

The authority’s figures for 2013 showed an income of MVR8.7 billion – of which 60 percent was denominated in dollars.

Despite this foreign currency income, however, dependence on imported goods results in a persistent dollar shortage, with just 2.7 months worth of reserves remaining at the end of February.

Proposals to increase government revenue were debated during February’s emergency Majlis sessions which also resulted in the requirement that resort lease extensions be paid within 2 years.

Additionally, the government has suggested that the Airport Service Charge, which has seen MIRA collect US$7.9million from foreigners leaving the country this year, be increased by 38 percent.

A World Bank report at the end of 2013 urged the government to reduce spending in order reduce the “unsustainable” public debt which currently stands at 81 percent of GDP, and could rise to 96 percent by 2015.

“Maldives is spending beyond its means and financing the budget risks affecting the real economy,” the report said.

Meanwhile, the outgoing governor of the MMA in December called for the state to reduce expenditure and to cease from printing money.

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Government rules out supplementary budget to plug 2013 shortfall, commits to T-bill sales

Finance Minister Abdulla Jihad has said the government has overcome the need to issue a supplementary budget to plug a shortfall in state spending for the current year, relying instead on short-term treasury bills (T-bills) to carry over its debts.

The comments were made as the Ministry of Finance today confirmed it had been officially requested to present the proposed annual 2014 state budget to parliament on October 30, with work ongoing despite the challenges posed by the upcoming Eid holidays.

Jihad previously told Minivan News that despite anticipating parliament would need to approve a supplementary budget after state offices were found to have exhausted their recurrent expenditure for 2013 by April, the government was now instead relying on T-bills to balance outgoings.

The finance minister last month said that the Maldives was relying on 28 day T-bills to help “roll over” debt one month at a time after parliament had failed to approve a number of measures to try and increase state expenditure not included in the 2013 budget.

T-bills are sold by governments all over the world as a short-term debt obligation backed by sovereign states. In the Maldives, they have a maximum maturity of six months, in which time they must be repaid.

The present government’s reliance on T bills has been slammed by the opposition Maldivian Democratic Party (MDP), which has previously questioned why there had been an increased reliance on short-term financing considering total state revenue rose 16 percent over the 12 months up to July 2013.

Borrowing fears

The Finance Ministry claimed in August that it had managed to reduce state spending since 2012, despite the MMA raising fears that the current “beyond appropriate” levels of government expenditure was leading to a vicious cycle of borrowing.

Early last month, the government said it hoped to secure longer-term financing measures to cover the shortfall in annual revenue as the number of 28-day T-bills sold by the state almost doubled in July 2013 compared to the same period last year.

According to the Maldives Monetary Authority (MMA) monthly review for August 2013, sales of T-bills for July 2013 has risen by 95 percent year on year.

The MMA stated that there had been a 163 percent in 28 day T-bills by July 2013 compared to the same time last year, despite sales of T-bills with a maximum maturation period of three month and six months declining by 63 percent and 83 percent respectively.

Sales of T-bills were also up 35 percent for July 2013 over the previous month, according to the MMA’s figures.

Budget issues

Finance Minister Jihad told Minivan News earlier this year that the state’s increased reliance on T-bills between July 2012 and July 2013 reflected the difficulties faced by the government in trying to raise budgeted revenue during the period.

He added that with only “a few people” in the private sector now interested in purchasing the short-term debt obligation from the government, T-bills has been sold as part of wider investments made by the state through the country’s pension fund.

Parliament in April rejected government-sponsored legislation to raise the airport service charge to US$30, which was among a raft of measures proposed by the Finance Ministry in the estimated 2013 budget to raise MVR 1.8 billion (US$116 million) in new income.

Other proposed measures include hiking Tourism Goods and Services Tax (T-GST) to 15 percent from July 2013 onward, leasing 14 islands for resort development, introducing GST for telecom services as well as oil, and “selectively” reversing import duty reductions.

Opposition’s T-bill concerns

Mahmoud Razee, former Economic Development Minister under the previous government, claimed T-bills should only be used by the state to help cover its operational expenses, rather than serve as a long-term means of financing.

“With income tax revenue having increased according to the Maldives Inland Revenue Authority (MIRA), why have [T-bill sales] gone up? Under the MDP government we were using T-bills to meet our cash flow,” he said. “This had nothing to do with the fiscal deficit.”

Razee argued that while the former government had itself sought foreign loans to balance the financial deficit while in power, the administration of former President Mohamed Nasheed had worked to avoid relying on T-bills for longer-term financial concerns like balancing the national fiscal deficit.

“The moment T-bills are increased, this directly affects loans that banks are able to give to the private sector, leading to the cost of borrowing increasing,” he said.

Razee claimed that the MDP government had attempted to try and extend income tax reforms introduced during its time in office to further boost revenues – a plan he said was cut short by the controversial transfer of power on February 7, 2012.

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50 companies fail to pay Business Profit Tax by April deadline: MIRA

A total of 50 eligible companies have failed to pay Business Profit Tax (BPT) to the Maldives Inland Revenue Authority (MIRA) by last month’s deadline, local media has reported.

Sun Online has reported that information shared by MIRA found that only 600 of a total of 650 companies eligible to pay BPT had paid the required funds by the deadline of April 30, 2013.

MIRA collected MVR 737,139,061 in BPT by the end of April 2013, according to the report. It received MVR 66,606,109 in BPT payments by April 2012.

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Court orders Zitahali Resort, Spa Kuda-Funafaru to pay MIRA US$300,000 in fines

Civil Court has ordered Zitahali Resort and Spa Kuda-Funafaru to pay over $300,000 to Maldives Inland Revenue Authority (MIRA) in fines, local media has reported.

The court order states that Zitahali Resort owes MIRA a total of $384,172.68 as lease rent, land rent, adjusted advance payment and fines from failing to pay the amount by November 2012, local media reported.

According to Sun Online, Zitahli is owned by Moosa Shiyam Abdullah Ali, brother of Maldivian Democratic Party MP Ahmed Hamza.

The Civil Court order states that Ali has three months to pay the full amount to MIRA.

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Government revenue 29 percent higher in November

Government revenue in November was 29 percent higher than the same period last year, the Maldives Inland Revenue Authority (MIRA) has revealed.

MIRA collected a total MVR 403.5 million (US$26 million), including US$17.1 million in US dollar receipts during November.

The revenue collected in November was 2.3 percent higher than forecast. Goods and Services Tax (GST) accounted for the largest portion of revenue with 54.6 percent while tourism taxes accounted for 18.4 percent.

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MIRA formulates policy for enforcement agencies

The Maldives Inland Revenue Authority (MIRA) has formulated and published on its website the official policy (Dhivehi) for taking action against persons or companies with unpaid taxes, fees, rents, royalties or other monies owed to the state.

Under the approved guidelines for the relevant authorities to take measures against non-compliers, the government could refuse to provide services, cease business transactions and refuse to award contracts for the persons or companies with dues to the state.

Exceptions to the first rule however include basic services provided by the government and services provided by one state institution to the other.

The authorities empowered to take the punitive measures and enforce the policy include the Economic Ministry, Finance Ministry, Transport Ministry, Male’ City Council, Maldives Customs Service and the Department of Immigration.

While the policy will be in effect from November 1, 2012, for the first six months the enforcement agencies should refuse to provide services only to companies that owe monies to the particular authority. However, from May 1, 2013, the relevant authorities would be required to check if the company or person owes monies to MIRA.

The exceptions however do not apply to the Maldives Custom Service and Department of Immigration during the first stage of implementation.

Meanwhile, earlier this month, MIRA began enforcing its policy on ‘Freezing Bank Accounts of Taxpayers’ with unpaid taxes, fees, rents, royalties and other monies owed to the state.

“Since publishing the policy, taxpayers were given a grace period of 1 month to settle all outstanding dues. The process for account freezing has been commenced for 37 taxpayers for failure to settle the dues in the given grace period, and the details sent to relevant authorities to freeze the bank accounts of five of these taxpayers, as of 8 October 2012. Some taxpayers who issued dishonoured cheques were also among those who will have their bank accounts frozen. The total owing from these dishonoured cheques amounts to MVR 450,000 (US$29,182),” reads a news item from MIRA.

Moreover, MIRA has filed a number of cases at the Civil Court to enforce judgments over unpaid rent and fines imposed for late or non-payment.

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MIRA files first GST-related court case

The Maldives Inland Revenue Authority (MIRA) has filed the first case related to the Goods and Services Tax (GST) with the civil court.

The case was filed on September 13 before being formally registered with the court last Saturday, September 27.

MIRA are claiming US$2,606.86 (MVR40,132) from DeMal Pvt Ltd for Tourism Goods and Services Tax (T-GST) and the fines incurred for non-payment.

T-GST was first introduced in September 2010 before being subsumed by Goods and Services Tax Act one year later.

GST currently imposes a 6 percent tax on non-tax goods and services in the country. T-GST is currently taxed at 6 percent but will be raised to 8 percent on January 1 2013.

The combined GST revenue stream has accounted for nearly 35 percent of MIRA’s income this year – over US$69million (MVR1.7billion).

Director General of MIRA’s revenue service Fathihullah Jameel was unavailable for comment at the time of press.

MIRA’s Commissioner General of Taxation Yazeed Mohamed last week lamented the inability of the authority to collect certain fees owed to the government, accusing the tourism ministry of being a major part of the problem.

Yazeed singled out the issue of tourism land rent as a major source of unclaimed revenue, arguing that MIRA could only pursue the cases through the courts.

“If rent is not paid we have to take it up in court. That is to obtain payments not paid for a certain period. Then it is used as an excuse. From that point on they get a free license to stay without making payments. Once a case is filed in court, it can go up to two years without a single payment,” Yazeed told Haveeru.

MIRA’s website shows that the authority is actively pursuing nearly US$17million (MVR261.8million) in fees and fines, with 85 percent of listed cases relating to land rents.

The biggest cases currently being pursued, in terms of revenue being claimed, involve the operators of Six Senses Laamu and Mehudufushi Island Resort, from whom MIRA is claiming US$3.1million (MVR47.7million) and US$3.2million (MVR49.2million), respectively.

The Medhufushi Island Resort case is also among those which have been registered with the court for the longest time. The case was first registered in July 2011 and has seen five hearings, according to MIRA’s site.

Another longstanding and significant case is that concerning the operators of Filitheyo Island Resort, who are being pursued for around US$2million (MVR30.8million) in a case first registered in June 2011 which is said to have had three hearings.

MIRA’s monthly figures show that tourism land rent for the year so far is only three quarters of that collected by the same point on 2011.

The tourism ministry hit back at this criticism earlier this week, with State Minister Mizna Shareef telling Minivan News that MIRA was also empowered to collect rent.

“It is very unfair and inappropriate for MIRA to make these statements,” said Mizna, who argued that the authority had been pressuring the tourism ministry to suspend operating licenses for late-payers without considering the wider implications for the industry as a whole.

“There has to be balance – the industry must be protected while rents are collected,” she continued.

Tourism is by far the largest industry in the country, contributing over 70 percent of GDP via associated industries and 90 percent of all foreign exchange receipts.

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