Parliament of Maldives has passed the Income Tax Bill, setting tax eligible income as USD 3,984.
The bill was passed with votes from 64 members present at the sitting today. Two members voted against the bill and one member abstained from the vote.
The bill 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. Minister of Finance Ibrahim Ameer said the raise in the tax bracket will see a decrease in state revenues next year.
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%
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.