Maldives Inland Revenue Authority (MIRA) has collected USD 1.3 million as income tax in May.
As per the statistics for the month of May, MIRA received a total of USD 1.3 million as income tax, which is the first income generated to the state through income tax.
The Income Tax Act came into effect in May 2020, six months after the act was ratified by President Ibrahim Mohamed Solih. The act states income tax must be collected from salaries and wages of individuals who earn more than USD 3,893 per month. Ministry of Finance says the state will earn over USD 38.9 million every year if the tax is collected using a progressive system.
Despite the addition of income tax, the latest statistics from MIRA indicate a significant decrease in total taxes it has received in May, as compared to the same month last year. As such, MIRA collected only USD 1.04 million as airport service charge in May this year, while it collected over USD 4.2 million in May last year.
Meanwhile, revenue from Green Tax also decreased significantly last month, compared to May 2019. In this regard, MIRA collecting only USD 500,000 as Green Tax in May this year, as compared to USD 4.99 million in May last year. In addition, the amount received as Airport Development Fees decreased to USD 1.09 million last month, from USD 4.25 million in May 2019.
MIRA recorded low tax revenues due the lockdown imposed in the country following the COVID-19 pandemic, with the suspension of tourist arrivals causing a major decline in state income. Another reason for the decrease in tax revenue is the extended tax deadlines MIRA has offered to businesses as part of mitigating the economic impact of the pandemic.