Charging Income Tax

The government has started charging income today.

President Ibrahim Mohamed Salih ratified the income tax bill on 17th December 2019 that was passed by the parliament during their last term. The government has started charing income tax today while the regulation to be implemented under the Income Tax Act was gazetted on Tuesday night.

As per the Income Tax Act, the tax will be charged on income from sources other than the salary. In that sense, those who receive income between 60,000 to 100,000 will have to pay 5.5% of their income as tax. Those who received income between 101,000 to 150,000 will have pay 8% of their income as tax.

The government has decided not to charge income tax on dividends received from companies. However, some people received millions on this source.

When the national budget was prepared for the year 2020 it was anticipated that the government will receive MVR 680 million as revenue from the income tax charge.