Parliament of Maldives has passed an amendment to the Income Tax Act to raise tax eligible income to USD 3,984.
During the whole house subcommittee meeting, parliamentarians completed the analysis of the bill which originally proposed minimum amount in revenues eligible for Income Tax to be USD 2,596. However, the amount was raised to USD 3,984 as the manifesto of the main ruling party, Maldivian Democratic Party (MDP), had proposed to take Income Tax starting from USD 3,984.
Although the government had said the raise in the tax bracket will see a decrease in revenues, most members supported aligning the values against the manifesto, as proposed in the meeting by MDP Parliamentary Group Leader Ali Azim. The originally proposed 8% for the lowest band was also reduced to 5.5% as the committee revised all tax brackets.
- The newly proposed five tax brackets are as follows:
- 1. Income USD 0 - USD 3,895: 0%
- 2. Income USD 3,895 - USD 6,490: 5.5%
- 3. Income USD 6,490 - USD 9,735: 8%
- 4. Income USD 9,735 - USD 12,980: 12%
- 5. Income USD 12,980+: 15%
Thirty-one parliamentarians voted in favour to pass the motion during the whole house subcommittee.
Income Tax Act will be effective after 3 months from the date of ratification. State Budget 2020 expects revenues over USD 44 million in Income Tax.