Maldives to settle vendor bills, offer payment plans amid fiscal challenges

President Mohamed Muizzu has unveiled a series of measures aimed at addressing the Maldives' fiscal and monetary challenges, following Sunday's cabinet meeting where the finance ministry presented a detailed paper on the issue.

The government will implement a structured payment plan to settle outstanding bills to companies, prioritising the oldest invoices in a transparent manner. A fixed payment amount will be established for bills below a certain threshold, with funds maintained separately to ensure timely payments.

In a bid to provide additional financial options to vendors, the government will offer the opportunity to convert outstanding payments into Treasury bonds (T-bonds), which will generate additional income. Vendors interested in renting land will also be given opportunities, and businesses will be able to offset money owed to the state, particularly taxes paid to the Maldives Inland Revenue Authority (MIRA).

To enhance the recovery of state dues, a task force comprising relevant authorities will be formed. This task force will prioritise the recovery of money owed to the state and explore additional short-term loan options beyond those currently offered by the fionance ministry.

The cabinet also decided to strengthen the foreign exchange market and boost demand for the Maldivian Rufiyaa. Import duties on goods imported by businesses earning foreign currency will now be levied in US dollars.

Additionally, pension contributions from foreign currency wages will be deducted in US dollars under the Pension Act, and corporate income tax for companies earning foreign currency income will be transferred to US dollars.