Charges sought against Kaani Hotels for tax fraud

Maldives Inland Revenue Authority (MIRA) has filed a request with the Prosecutor General’s Office (PG Office) to conduct a criminal investigation and press charges against Kaani Hotels which is suspected of tax fraud.

Kaani Hotels is a guesthouse chain in K. Maafushi.

There are four guesthouses in operation under the brand:

• Kaani Palm Beach
• Kaani Grand Seaview
• Kaani Village
• Kaani Beach Hotel

MIRA states they suspect Kaanu Hotels of providing false information on Green Tax, GST, BPT and Income Tax statements submitted by Kaani Hotels for the four properties for the period spanning from January 1, 2019 to September 20, 2022. The authority said they suspect that the false information was provided intentionally for the purpose of evading tax.

MIRA outlined the issues they have uncovered during their own investigation. They include:

• Failure to include information of all guests arriving at the properties in the statements submitted to MIRA by Kaani Hotels
• Failure to report revenue earned from guests arriving through foreign tour operators and guests arriving as free independent travelers
• Failure to report the majority of revenue earned from services such as airport transfers, restaurants, spas and excursions

According to MIRA, as part of their investigations, they raided an office where business documents of the taxpayer is kept and questioned and took statements from individuals suspected of involvement in the crime.

The authority said it has requested charges against ‘Kaani Hotels and Tours Private Limited’ and ‘Asna Investment Private Limited’, alongside two directors of the company, Abdulla Nasheed and Aminath Asima Saeem in addition to Aishath Razna, who headed the company’s account-related works.

Furthermore, MIRA said it has ordered the company to pay over USD 800,000 (MVR 13.3 million) as unpaid taxes following GST and GRT audits.

Any act committed knowingly, intentionally, and with the purpose of evading or assisting a taxpayer in evading tax is considered a crime under Article 64 of the Tax Administration Act.