President ratifies introduction of remittance tax

President Abdulla Yameen Abdul Gayoom, on Thursday, ratified the amendment to Employment Act which allows for the implementation of a three percent remittance tax.

The amendment was passed by the People’s Majlis on August 17 with the vote of 41 lawmakers.

Remittance tax needs to be paid to Maldives Inland Revenue Authority (MIRA) through banks involved in transfer of money earned by expatriates - who work in Maldives - to their home countries.

The tax will apply to both expatriates with work visas, and those who are legally bound to have a work visa – even though they may not have one, or if their visas have expired.

The amount of money those registered for remittance tax need to pay each month needs to be calculated and written up in a statement – and the statement and the amount owing sent to MIRA by September 15.

Tax evasion or assistance in tax evasion will be punished with a fine equal to the amount of money sent abroad.

The amendment states that the salary and service charged earned by an expatriate who has a work visa, or is not allowed to work without a work visa can only be paid to them by their employees after/through a bank account they must open in a registered bank in Maldives.

Employees need to open bank accounts for their expatriate employees in a registered bank in Maldives within three months the bill takes effect.