The government has proposed sweeping amendments to the Tax Administration Act, seeking to fortify fiscal discipline and reinforce regulatory oversight. The bill, introduced in Parliament by Villimalé Member Mohamed Ismail on behalf of the administration, sets out to intensify penalties for tax-related offences and broaden the enforcement mandate of the Maldives Inland Revenue Authority (MIRA).
Central to the proposal is a provision empowering MIRA to determine tax liabilities in cases where required statements are not submitted. By codifying guiding principles for such assessments, the amendment aims to formalise unilateral determinations within a more robust statutory framework. Accompanying these changes are revisions to MIRA's remit for audits and investigations, clarifying procedures while enhancing its authority to recover outstanding revenue.
The bill addresses the punitive dimension of fiscal enforcement, noting that under existing law, tax evasion is punishable by house arrest for a period ranging from three months to one year. The proposed legislation increases the severity of such penalties, replacing confinement at home with custodial sentences of three months to two years. In parallel, it introduces newly defined offences that include the authorisation of false statements, the omission of required information, mishandling of financial records, and intentional non-payment of taxes.
Measures targeting procedural lapses are strengthened under the bill, which replaces the current sanction of house arrest for one to six months with custodial sentences of equivalent duration for failures such as non-submission of tax statements or supporting documentation. Offenders may also face fines up to USD 16,212.06. Non-compliance with requests from the Commissioner General of Taxation, or their designated representative, is among the infractions subject to enhanced penalties.
Another dimension of the reform concerns non-tax government receivables. Presently under the Attorney General's jurisdiction, responsibility for initiating legal action to recover these funds would be transferred to MIRA. Attention is also given to statutory timelines, under which legal proceedings for tax-related offences are currently required to commence within two years of the violation. The amendment introduces exceptions to this limitation, particularly for breaches involving missed registration deadlines, failure to submit required documentation, or the withholding of payments.
The proposed legislation is set to enter into force upon parliamentary approval, presidential ratification, and its subsequent publication in the Government Gazette.