Business Society & Culture

Maldives govt to scrap Remittance Tax

The government has made the decision to scrap the ‘Remittance Tax’ applicable to money transferred out of the country by foreign employees.

Finance Ministry’s Chief Financial and Budgeting Executive Sharuvash Adam said the decision was made due to decreased financial transactions taking place through the banks in sending money abroad.

The ministry’s Tax Policy Consultant, Arushad Jameel said imposing remittance tax on foreigners was very discriminatory.

“The system is still not functioning well despite introducing the remittance tax. This tax is very discriminatory, it is imposed on certain people only. It is being implemented in low-income earners”, Arushad said.

Arushad said the amount of money sent abroad through banks significantly decreased with the introduction of the tax.

“As a result of imposing remittance tax, the salary was being given to expatriates in the Maldives from foreign bank accounts, among other undesirable actions. When expatriates depart from the Maldives, the tax is charged on the dollars they carry with them. We are not receiving a good revenue from this tax, which is why we have decided to scrap it all together”, he said.

The government introduced a three per cent remittance tax on expatriate workers in 2016. Under the law, remuneration of all expatriate workers in the Maldives must be deposited in accounts of banks operated locally. Employers that violate this rule were fined MVR 50,000.

While over US$ 500 million in salary is sent out of the country yearly by expatriates, the government last year received MVR 101 million as remittance tax. This is a drop-in contrast to the MVR 114 million received in 2017.

Full details are available at the link below:

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Source URL: Google News

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