Minister of Finance Ibrahim Ameer has the introduction of Income Tax will not end the observance of Business Profit Tax (BPT) or any other taxes.
Speaking to PSM News, Minister Ameer dismissed media claims saying Income Tax Act was drafted in a manner that includes all existing taxes. The Income Tax Act includes the newly proposed tax from incomes of individuals in addition to existing BPT and Bank Profit Tax and others. The Income Tax Act brings all taxes under one umbrella.
Local media have misunderstood the statement of the ministry that the existing Business Profit Tax Act and Bank Profit Tax Act will be abolished as both these taxes have been moved under the new Income Tax Act.
Minister Ameer further said the only addition to the existing taxes will be the tax from incomes of individuals and all other taxes will continue to exist. He said the decision was made as individuals and businesses also generate incomes and this aligns the tax bill better.
The state estimates to earn over USD 44 million in taxes. The administration has proposed Income Tax from individuals who earn more than USD 2,590 a month.
While an 8% of Income Tax is proposed to be charged on incomes of between USD 2,590 to USD 3,885, while 10% is to be charged from individuals who earn between USD 3,885 to USD 6,475. Income Tax amounting to 15% is to be charged from incomes of above USD 6,475.
Wages, business profit, rent from tangibles and intangibles, dividends, interest, and royalty are all eligible for income tax. It is expected about 6-thousand people are eligible to pay Income Tax.