Government to deduct corporate taxes from delayed payments owed to businesses

President Dr Mohamed Muizzu said last night that the government will introduce a tax deduction mechanism to address the issue of businesses being required to pay taxes to the Maldives Inland Revenue Authority (MIRA) despite delays in receiving payments from government projects.

The President made the remarks during a meeting with small and medium enterprises held at the Social Centre, after several business owners raised concerns that MIRA proceeds with tax recovery even when companies have not yet been paid for government work.

Some business owners proposed that taxes owed to MIRA be deducted directly from payments due from the government, instead of enforcement action being taken against companies.

Responding to the concern, President Muizzu said that a system of this nature is already in partial use, but will now be expanded and implemented in a broader and more structured manner.

“In a more comprehensive way, it will be applied to as many people as possible. We will compare what you have to pay with what the government has to pay, and then assess any legal requirements. We will work with MIRA and the Ministry of Finance to find a suitable solution,” President Muizzu said.

While the exact amount expected to be settled under the new arrangement has not yet been determined, the President assured that the policy will be introduced as a practical solution for businesses.

President Muizzu also addressed complaints regarding delays in government payments, stating that efforts are underway to settle payments owed to many companies by the end of this month, with the remaining amounts expected to be cleared by the end of Ramadan.

Business owners at the meeting also raised concerns over high penalties imposed for delays in clearing goods imported by air and sea.