President Dr. Mohamed Muizzu has ratified an amendment to the Income Tax Act, raising the withholding tax on payments made to foreign contractors engaged in construction projects in the Maldives from 5% to 10%.
The amendment aims to establish a level playing field between local Maldivian businesses and foreign contractors operating in the construction sector. It further stipulates that payments made to non-resident contractors shall not be included in the calculation of taxable income. According to the Maldives Inland Revenue Authority (MIRA), the change is projected to generate an average annual increase in state revenue of MVR 251 million.
