Unpaid taxes and fines: where do we find a solution?

It was revealed by the Ministry of Finance of the Maldives that MVR872.4 million was not received in TGST by August 2022.

One of the biggest complaints that are seen yearly is the unpaid taxes when it comes to the tourism industry. Whether that is in regards to hotels, resorts or guest houses, the tourism industry is no stranger to the ‘ name and shame’ list that is released by Maldives Inland Revenue Authority (MIRA).

The name and shame list which is drafted and published by MIRA discloses names of organizations that fail to pay their annual taxes, and the tourism industry takes up a big chunk of that list with the number of resorts not paying their dues. This list has become the talk of many, especially with the dire debt situation in the Maldives that was revealed earlier this year. With the country's debt count hitting over MVR 100 billion as of 2022, the tourism sector which could easily help resolve the debt issue may as well be contributing to it.

And while the Government has been taking several measures in order to maintain the economic crisis that may arise in the Maldives, the efforts being put into reducing the debt situation feels a bit aimless with the lack of expenditure reduction plans by the Government.

It was revealed by the Ministry of Finance of the Maldives that MVR872.4 million was not received in TGST by August 2022. TGST or Tourism Goods and Services Tax as well as Green Tax make up a large portion of the revenues earned from the tourism sector.

Answering questions by MPs in the Parliament’s  25th sitting of the 3rd session of 2022, the Minister of Finance Ibrahim Ameer has said that since 2021 the total amount of unpaid TGST totals to MVR 632 million and fines amount to MVR 240 million, bringing the total of unpaid TGST with fines to MVR 872 million. 

In addition to this, the amount of unpaid Green Taxes includes MVR 85 million and fines of MVR 42 million, hence a total to MVR 128 million: bringing the total of both unpaid taxes to over MVR 1 billion.

A good question to ask at this point would be why no measures appear to be taken in regard to these unpaid taxes as revealing the numbers, fines and naming and shaming seem to have no effect on these companies and resorts that continue to flourish in their respective industry while carrying these large sums of unpaid fines.

One of the main arguments raised by the public in regards to such large amounts of fines being unpaid by the tourism sector and having it pile on for so long are how quick the state is when it comes to taking action towards unpaid fines of citizens.

Whether it is a fine when it comes to unpaid bills or motorcycle fines, these small amounts are taken more seriously than the unpaid GST, TGST and Green Taxes that withhold the state from earning a large sum of revenue. So where do we draw the line and start taking action against companies or even resorts that are conducting their business and making profits without paying a single coin for the fines that are owed?

More from MFR