The Parliament of the Maldives has passed the amendment bill to the Small and Medium Enterprises (SME) Act, which revises the classification of SMEs.
The bill was submitted by Parliamentarian Ali Riza to provide a clear classification of SMEs following the implementation of minimum wage under the new Employment Act, which allocates different minimum wage amounts for different classes of SMEs. The bill was passed by the parliament with some changes brought during committee review.
As per the passed bill, a business is classified as a micro business if the number of staff is between 0-5, the total income is below USD65,000 and net profit is below USD16,000. A business is classified as a small business if the number of staff is between 6-30, total income is between USD65,000 – USD650,000 and net profit is between USD16,000 – USD160,000. Meanwhile, a business can be classified as a medium-sized business if number of staff is between 31-100, total income is between USD 650,000 – USD1.9 million and net profit is between USD160,000 – USD320,000.
The committee report noted the change of classification was deemed necessary as small changes could alter the classification of the business, which complicates matters related to taxes and wages.