MVR 7.7 Million collected as Remittance Tax in December 2016

[vc_row][vc_column][vc_column_text]The Maldives Inland Revenue Authority has stated that the tax body has collected MVR 7.7 million as remittance tax from expatriate workers living in Maldives during the month of December 2016.

The Authority started enforcing a tax on transactions made by foreign workers in Maldives in October 2016, following amendments to the Employment Act, which mandated the authority to collect 3% of the remitted amount.

A total of MVR 14 million has been collected as remittance tax since the amendment came into effect. This is a 0.1% share of the total revenue generated by the taxation body.

From January 1 2017, MIRA had also ordered banks operating in Maldives to impose Remittance Tax on cash withdrawals abroad, from accounts of expatriate workers in Maldives.

The Remittance Tax is a tax imposed on money transferred out of the Maldives by “foreigners employed in the Maldives”. Remittance Tax, which is collected at the rate of 3% of the remitted amount, came into effect on 1 October 2016.

It is imposed pursuant to the Fifth Amendment to the Employment Act (Law Number 22/2016), which was ratified by the President on 25 August 2016. “Foreigners employed in the Maldives” refers to “foreigners who have been issued a work visa pursuant to the Maldives Immigration Act (Law Number 1/2007) and foreigners who are not allowed to work in the Maldives without a work visa, even though such visa has not been issued or the visa has expired.”

Banks and money transfer agencies operating in the Maldives are responsible for collecting the tax from foreigners employed in the Maldives at the point of remittance.[/vc_column_text][/vc_column][/vc_row]