The state has collected MVR 3.8 billion as income tax as of August this year.
According to the figures released by the national tax agency, Maldives Inland Revenue Authority (MIRA), the state received MVR 1.9 billion in corporate income tax, while MVR 901 million was collected in bank income tax.
Income taxes include withholding tax on non-residents, income tax on private individuals, and withholding tax on employees. The state collected MVR 741 million in withholding tax from non-residents as of August this year and MVR 246 million in withholding tax from private individuals and employees.
According to MIRA data, income tax revenue thus far this year accounted for 25 percent of the total revenue collected by the state as of August.
Individuals are taxed on their income if their taxable income exceeds MVR 720,000 per annum. If their income is more than MVR 720,000 but less than MVR 1.2 million, it will be taxed at 5.5 percent. If it is greater than MVR 1.2 million and less than MVR 1.8 million, it will be taxed at 8 percent. If income is greater than MVR 1.8 million, but less than MVR 2.4 million, it will be taxed at 12 percent. The taxable percentage increases to 15 percent if income is more than MVR 2.4 million.
Employee's withholding tax is levied if the employees' wages exceed MVR 60,000 per month. If the wage is more than MVR 60,000 but less than MVR 100,000, the tax will be charged at 5.5 percent. Wages between MVR 100,000 and MVR 150,000 are taxed at 8 percent, while wages between MVR 150,000 and MVR 200,000 are taxed at 12 percent. If the wage is more than MVR 200,000, the tax will be 15 percent.
The Income Tax Act has been in effect since January 1, 2020. However, wage income tax came into effect on April 1, 2020. With the introduction of the Income Tax Act, the tax on business profits under the Business Profits Tax Act has been abolished.