Parliamentarian Yauqoob Abdulla has said the decision not to impose tax on dividends in the recent income tax bill passed by the parliament will impact businesses positively.
Speaking to PSM News, Parliamentarian Yauqoob said the introduction of income tax implements a holistic tax system in the Maldives that benefits the local businesses adding it complements and strengthens the tax system in the country.
Yauqoob further said one of the biggest concerns during the draft stage was the approval of dividend tax by the committee. He said it was a grave concern as it allows for double taxation. Dividend tax was discarded hence, following concern from the public.
Yauqoob also discussed the efforts of the executive and the judiciary to creating a conducive environment for businesses. He said the decision not to impose tax on dividends is a green signal to investors, taxpayers and potential investors as the tax system is a key indicator to investor decisions.
The parliamentarian further said the bill has provided legal solutions to current tax issues as it has further strengthened and developed the Tax Administration Act and Income Tax Act and the roles of Maldives Inland Revenue Authority (MIRA).
Additionally, the bill also holds businesses more responsible by ensuring better accountancy practices. Yauqoob said he expects the introduction of Income Tax to enhance the practices of businesses further.
While the parliament approved the Income Tax Act on December 4, the bill will be effective three months from the date of ratification. The introduction of Income Tax will boost the state budget positively as the state expects to generate over USD 44 million in income tax.