Attorney General’s Office has confirmed that the office issued a legal opinion in January 2019 stating that Indian company GMR does not need to pay tax to the Maldivian government.
A statement confirming the government’s stand was released on Thursday after the former Deputy Attorney General Ahmed Usham made accusations that the office had issued a counsel stating that no fines or taxes have to be paid by the Indian company.
In a tweet published by Usham, he said that during the arbitration process in terminating the agreement between GMR and the Maldivian Government, the current AG Ibrahim Riffath had been working as a lawyer representing GMR company. If such a counsel was issued by Riffath, it has to be clarified, said Usham in his tweet.
Firing back, the Attorney General had tweeted that he made no decisions concerning GMR after assuming his position as the Attorney General.
Maldives Inland Revenue Authority had last year asked GMR company to pay USD 23 million as Business Profit Tax, Withholding Tax and in fines. However, the amount has not been paid to date.
While Usham was the Deputy Attorney General, he had issued counsel to MIRA stating that the the tax payments have to be borne by GMR and cannot be forgiven.
However, the statement released by the AG Office on Thursday revealed that the office had changed its stand on the matter, with the statement reading that the final award issued after the arbitration tribunal decided that the payment awarded for the termination should be paid in full to GMR without making any deductions. This was during October 2016.
Accepting the outcome of the arbitration, the Maldivian government had paid the full amount owed to GMR during November of the same year. In their statement, the AG Office noted that a letter was sent by Maldives Airports Company Limited to GMR stating that no tax will be imposed on the amount paid to GMR.
“We have been informed by the Government, and, therefore, confirm that no sum will be imposed by the Maldives inland Revenue Authority on the Final Award Sum in respect of taxes. As a result, there is no need for ay sum to be added to the Final Award Sum to take into account any tax to be imposed by the Maldives Inland Revenue Authority”, read an excerpt of the MACL letter included in the statement.
The AG Office further said that even in the event that MIRA does impose tax on the final award sum, GMR is not liable to pay the tax, and has to be paid by MACL and the Maldivian government instead.
The mega project to develop the country’s main airport worth over USD500 million was awarded to GMR during the tenure of former President Mohamed Nasheed, despite concerns by the then opposition.
Shortly after the controversial resignation of Nasheed, the government kicked out GMR and cancelled its lucrative contract to run the airport.
The government had maintained that the contract was invalid in November 2012 after the parties fell into dispute over a fee GMR imposed on departing passengers, which the government said was contrary to Maldivian law.
Attorney General Riffath with Economic Minister Fayyaz
