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The government has introduced a mechanism allowing businesses to offset taxes owed to the state against payments due to them for goods and services supplied to government institutions.
Mariyam Adheela
MALE’: The government has introduced a new arrangement allowing businesses awaiting payments from state institutions to deduct those outstanding amounts from their tax liabilities.
In a statement, the Ministry of Finance and State Enterprises said businesses owed money by government institutions can submit applications to the Maldives Inland Revenue Authority (MIRA) to offset the outstanding payments against taxes due.
The ministry has requested businesses to provide all relevant financial details in accordance with MIRA’s procedures when submitting their applications.
Under the arrangement, if the taxes owed by a small or medium-sized enterprise (SME) exceed the amount the government owes it, the outstanding government payment will be deducted from the tax liability. The business must then pay the remaining balance to MIRA.
If the amount owed by the government exceeds the business’s tax liability, the government will pay the remaining balance to the business after the tax amount has been settled.
The decision follows concerns raised by SME owners during consultations with President Dr Mohamed Muizzu about delays in payments owed by the government.
During the discussions, business owners highlighted the difficulties caused by outstanding payments for goods and services provided to state institutions.
The President had pledged to explore legal and procedural measures to ease the burden on businesses, in response to their concerns.
