The original Dhivehi article was published on Mihaaru.com website on 25th March 2017.
by Abdullah Jameel
The following is a loose translation:
Last Wednesday night, Maldives Inland Revenue Authority (MIRA) instantly froze one of Maldives’ biggest company, Villa Shipping and Trading Company’s Bank accounts. The giant company that employs around 5000 staffs is facing many difficulties now.
This isn’t the first time the company which has a large share in the tourism industry is facing this problem. Two years back the company faced a similar situation and went through huge financial losses.
Villa Group of Companies’ Chairman and Jumhooree Party’s Leader Gasim Ibrahim believes that this is a direct political blow to him by the government. Soon after the court ruling on Tuesday to pay the 18 million dollars of the outstanding lease money along with the fine to develop Thaa atoll Elaa island as a Villa resort, it is understood that the company’s accounts were immediately frozen over.
It is claimed that after the court ruling, through Maldives Monetary Authority (MMA) MIRA ordered to freeze the accounts without even giving a notice.
MIRA froze Villa’s accounts, after terminating the agreement of Elaa island over outstanding dues when High Court annulled the ruling of last year’s Civil Court decision which said that the island was confiscated by the state, not in compliance with the agreement. Villa has now submitted the case to appeal to the Supreme Court.
Even though the nature of the case is a financial, political actors claim that what Villa is facing is rather a political matter.
Some opposition members believe that whenever government comes under political pressure, and if Gasim is seen to be with the opposition the first step by the government is to halt Gasim’s businesses.
Gasim said that when MIRA froze Villa Shipping’s accounts the company faces a lot of difficulties financially. The items to be cleared from custom are stuck and they are not receiving payments to the company. In addition to the difficulties they face to get things done through the government, they are also facing the problem of not receiving various funds from abroad.
“For a huge company like this to face, a humiliation like this isn’t it outrageous or what? Where are the investors guarantee now?”, said Gasim. “This didn’t happen because I owe any money”.
While Villa Shipping’s accounts have been frozen, renowned Businessman Abdulla Jabir’s Yacht Tours’ accounts have also been frozen last week. It is also claimed that the company’s accounts have been frozen over a failure to make payment. However, Yacht Tours said that the money is not yet paid as the case is ongoing in the court. Jabir said that his accounts have been frozen as a political weapon. “This is certainly a political issue. There is no way I am not going to sue MIRA over this,” said Jabir.
The talks on political platforms:
– If people owe money why do their accounts get frozen based on the political side that they take?
– If they owe money why does MIRA take a long time to collect money?
– Likewise, if Jabir and Gasim were on the government’s side would their accounts be frozen too?
Why does MIRA halt funds?
In 2010 national tax bodies were established by the government with exceptional powers, emulating systems elsewhere. So MIRA possesses the power to take action against those who avoid tax by freezing their accounts and are entitled to exercise other powers, even if it is an independent organisation.
There are procedures to follow before freezing an account over non-payment. Like sending a 30-day notice, making an agreement for an instalment plan to pay back and then to submit the case to court are steps to follow.
A former senior employee at MIRA said that there are stages to follow when any company or individual who owes money to the state doesn’t make the payment, before freezing their accounts. So if anyone’s accounts are being frozen then it should be done in the same manner as well.
“There is an Enforcement Policy in MIRA. As per that policy before freezing the bank accounts a notice should be given. That is the only way it shall be done.” said the former MIRA senior staff.
The informant further said that that the accounts cannot be frozen if a court order is issued to delay it in response to a notice issued by MIRA. However, he is unaware that if and when a judgement is passed in favour of MIRA then that account can be frozen instantly.
“Not sure how the action is taken now if a case concludes in favour of MIRA. Also, no account can be frozen while the case is ongoing.”
MIRA did not comment on accounts freezing cases. An official from MIRA said that they do not have the policy to disclose information on specific companies and that information will be shared only with that company.
When addressing Villa’s bank account freezing matter he said that this time the accounts are frozen based on the notice issued earlier.
“For outstanding dues of lease money and penalty amounting to 100 million dollars for rented islands and lagoons, Villa’s accounts has been frozen even before. This could be the same case, but it is a separate case now. However, this is not the manner MIRA took action earlier.” he said.
MIRA did not respond to the freezing of accounts of Villa and Yacht Tours case.
Even though now MIRA has said that they will not share details of specific company’s, previously they shared details of companies where accounts have been frozen. However recently MIRA has refused to share details of accounts in times of political instability and only shared information just with the company in question.
“When needed MIRA did disclose information of those company’s where accounts have been frozen and those company’s who did not pay GST too. So I do not see the reason why a specific account’s information is not revealed,” said MIRA’s former senior staff.
Further added, after auditing, if MIRA finds that the amounts specific companies need to pay are insufficient then the notice they send to these companies are kept undisclosed. However when it comes to the freezing of accounts then there is no need to hide it.
Seeing the behaviour of MIRA lately, many people believe that MIRA is hugely influenced by the government. MIRA has discarded their professionalism and is more like a political weapon that promotes the government’s agenda.
Source URL: Mihaaru.com