Governmentt commences collecting business profit tax

Business Profit Tax Act passed by the Peoples’ Majlis and ratified by President Mohamed Nasheed has been implemented from July 18, yesterday and the government has commenced collecting the business profit tax from business companies.

According to the Business Profit Tax Act, all business enterprises are required to pay 15% of the profits, provided that total profits exceed Rf500,000. And according to the Act, if the profits of an enterprise do not reach Rf500,000, no tax has to be paid by that company.

Business Profit Tax Act, which is made up of six chapters, set out a framework and guidelines for placing a levy on profits of businesses operating in the Maldives.

Business Profit Tax was stipulated to reform the economy of Maldives and to make the state’s revenue streams sustainable. The tax include among the fiscal reforms implemented by the government to increase state revenue and reduce expenditure.

Meanwhile, the government began collecting tax on tourism goods and services from January this year. According to President Nasheed the government is confident that the economic reforms – new revenue measures and taxation reforms – would open new paths to substantially increase the country´s wealth and prosperity.