Majlis Accepts Tax Administration Bill Mandating Upfront Payments for Appeals

The People’s Majlis has voted to accept a government-sponsored bill amending the Tax Administration Act, introducing stricter pre-payment thresholds for taxpayers seeking to challenge disputed tax assessments before the Tax Appeal Tribunal.

The legislation passed its preliminary vote with 54 members voting in favour and 11 against out of 65 parliamentarians present. Following its acceptance, the bill was referred to the Parliamentary Committee on Economic Affairs for detailed review, after its first reading on 20 October.

advertisement

advertisement

Under the primary terms of the bill, taxpayers disputing an assessment issued by the Maldives Inland Revenue Authority (MIRA) will be barred from lodging an appeal with the Tax Appeal Tribunal unless they have paid at least 50 per cent of the contested tax liability.

Sponsoring the legislation, Fonadhoo MP Mohamed Mamdooh explained that the measure seeks to establish clear statutory grounds requiring taxpayers to deposit the contested sums upfront, reaching up to 100 per cent in specific circumstances, prior to initiating formal appeals against MIRA’s assessments.

Speaking during the floor debate, Feydhoo South MP Ibrahim Didi supported the tighter recovery rules, arguing that successive administrations have allowed major commercial entities to skirt statutory dues.

“Under the implementation of the Maldives’ tax laws, affluent individuals receive protection, large businesses reap profits, and as successive administrations come and go, tax liabilities continue to be waived,” Didi said. “Companies whose taxes are waived go on to make investments worth hundreds of millions of rufiyaa in that very year. Because of those who evade taxes in this manner, the state is deprived of billions of rufiyaa in revenue that should rightfully enter the state treasury.”

Opposition lawmakers strongly criticised the measure, characterising the elevated deposit threshold as an aggressive cash-gathering effort triggered by recent fiscal missteps.

Vaikaradhoo MP Hussain Ziyad pointed out that the pre-appeal deposit threshold had already been modified earlier this year to 25 per cent, and questioned the rationale behind raising it further.

“The threshold in this law was amended to 25 per cent earlier this year. Now they are altering it to 50 per cent under the pretext of expediting cases before the Tribunal,” Ziyad said.

 “A tribunal cannot adjudicate matters merely because the pre-payment requirement is set at 25 per cent or 50 per cent. The truth is that the state needs money. Having rolled back the tax intended to be collected from foreign tour operators, they are now trying to make up for that loss.”

The debate follows recent legislative reversals by the government, including the rollback of an offshore Tourism GST scheme on foreign booking platforms that had been projected to yield approximately MVR 1.6 billion annually.