MIRA responds to MMA governor's criticism, says tax audits follow risk-based approach

The Maldives Inland Revenue Authority (MIRA) has responded to criticism from Maldives Monetary Authority (MMA) Governor Ahmed Munawwar, stating that its tax audit procedures are based on compliance risks rather than the size or nature of businesses.

In a statement issued on Wednesday, MIRA said it applies tax laws equally to all taxpayers and conducts audits under a risk-based compliance management framework.

The statement follows remarks made by Munawwar during a parliamentary committee meeting on Tuesday to examine the proposed 2027 state budget.

During the meeting, the Governor criticised MIRA for what he described as its focus on auditing small businesses rather than resorts.

Munawwar said only around 50 resorts were paying Business Profit Tax (BPT) and questioned whether the financial accounts of other resorts accurately reflected their earnings.

He called on MIRA to examine the financial records of resorts to determine whether their reported profits and tax declarations were accurate.

Responding to the remarks, MIRA said it has followed the principle of applying tax laws equally to all taxpayers since its establishment, regardless of business size or sector.

The authority said its audit activities are conducted under a strategic plan and a published Compliance Improvement Plan.

"Taxpayers selected for audits by MIRA are identified through fair procedures under a compliance risk management framework based on a risk-based approach," the authority said.

MIRA said its audit programmes cover businesses operating in the tourism sector as well as other industries.

It also noted that a substantial proportion of the tax revenue it collects comes from tourism-related businesses.

The authority's statement marks its first public response to criticism directed at its operations by the central bank Governor.

MIRA also highlighted measures introduced to reduce the administrative burden on small businesses.

The authority said smaller businesses benefit from simplified arrangements for record-keeping, auditing and filing tax returns.

According to MIRA, these measures are intended to make tax compliance easier for businesses with fewer resources.

It said its procedures are developed in consultation with businesses, with the objective of providing support and encouraging more taxpayers to meet their obligations.

However, MIRA stressed that it continues to take enforcement action against taxpayers who deliberately evade taxes.

The authority said such action is undertaken in accordance with established procedures, regardless of the size or sector of the business concerned.