Maldives slaps expats with remittance tax

An expat worker pictured at the local market in the capital Male. MIHAARU PHOTO/MOHAMED SHARUHAAN

An expat worker pictured at the local market in the capital Male. MIHAARU PHOTO/MOHAMED SHARUHAAN

Parliament on Wednesday an amendment for the Employment Act to impose a three percent remittance tax on expatriate workers and obligate employers to deposit expat remuneration in banks.

The government proposed amendment was passed with 41 lawmakers voting in favour out of the 66 present during Wednesday’s sitting.

The Bill states that all remuneration and allowances paid by employers to expatriate workers with work visas, or unregistered workers, must be deposited in accounts under the employees’ name at a registered bank in the Maldives.

Employers that do not deposit the salaries of their expatriate employees in banks will be penalised between MVR 10,000 – 50,000. The amendment also authorises the state to terminate services to employers that violate this Act.

The members of parliament had unanimously conceded to impose a three percent tax on expatriates’ remittance during the debate. However, a number of parliamentarians had dissented its implementation without an integral procedure to collect the tax.

Pro-government members further asserted that the remittance tax and deposition of expatriates’ salaries in banks will provide some solution to the predicament of unregistered expatriates.

According to Maldives Immigration’s official statistics, there are over 100,000 expatriates currently working in the Maldives. The statistics estimate unregistered expatriates to number 20,000.

The government’s proposed state budget for 2016 projects MVR 56 million as revenue from remittance tax this year.

1 Comment on "Maldives slaps expats with remittance tax"

  1. Maldives being a small Island nation with limited foreign missions, ofcourse including the UN offices, Pak, Indian, Indonesian missions, does the Maldian Government would term their “DIPLOMATIC STAFF” who come on a 3 year transfer from their home country as “EXPATS” and that this tax be paid by them also ? Please explain whether Maldivian Government has thought about it to give any exemption to the Diplomatic Community

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