Front Matter

Copyright Page

IMF Country Report No. 21/234

MALDIVES

TECHNICAL ASSISTANCE REPORT––ESTIMATING TAX EXPENDITURES

October 2021

This Technical Assistance Report paper on Maldives was prepared by a staff team of the International Monetary Fund. It is based on the information available at the time it was completed in March 2021.

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Title page

FISCAL AFFAIRS DEPARTMENT

Maldives

Estimating Tax Expenditures

Shafik Hebous, Marc Seguin, and Nate Vernon

Technical Report

September 2021

The contents of this report constitute technical advice provided by the staff of the International Monetary Fund (IMF) to the authorities of the Maldives (the “TA recipient”) in response to their request for technical assistance. This report (in whole or in part) or summaries thereof may be disclosed by the IMF to IMF Executive Directors and members of their staff, as well as to other agencies or instrumentalities of the TA recipient, and upon their request, to World Bank staff and other technical assistance providers and donors with legitimate interest, unless the TA recipient specifically objects to such disclosure (see Operational Guidelines for the Dissemination of Technical Assistance Information— http://0-www-imf-org.library.svsu.edu/external/np/pp/eng/2013/061013.pdf). Disclosure of this report (in whole or in part) or summaries thereof to parties outside the IMF other than agencies or instrumentalities of the TA recipient, World Bank staff, other technical assistance providers and donors with legitimate interest shall require the explicit consent of the TA recipient and the IMF’s Fiscal Affairs Department.

Abbreviations and Acronyms

BPT

Business Profit Tax

CFC

Controlled Foreign Corporation

ETR

Effective Tax Rate

FAD

Fiscal Affairs Department (of the IMF)

GFCF

Gross Fixed Capital Formation

GDP

Gross Domestic Product

GST

Goods and Services Tax

HIES

Household Income and Expenditure Dataset

IMF

International Monetary Fund

ITA

Income Tax Act

MIRA

Maldives Inland Revenue Authority

MNEs

Multinational Enterprises

NPISH

Non-profit Institutions Serving Households

MOF

Ministry of Finance

OECD

Organization for Economic Cooperation and Development

PIT

Personal Income Tax

R&D

Research and Development

SUT

Supply and Use Table

TE

Tax Expenditure

TPU

Tax Policy Unit

VAT

Value-Added Tax

WEO

World Economic Outlook

WHT

Withholding Tax

Preface

At the request of Mr. Ibrahim Ameer, Minister of Finance, a team headed by the IMF Fiscal Affairs Department (Tax Policy Division) conducted a ‘remote’ mission to the Maldives during March 1– 18, 2021, to assist the authorities in estimating tax expenditures. The mission comprised Shafik Hebous (mission head), Nate Vernon (FAD), and Marc Seguin (FAD expert).

The mission held discussions with the Ministry of Finance (MoF) led by Mr. Ahmed Saruvash Adam (Chief Financial Budget Executive), Ismail Ali Manik (Minister of State for Finance), and Fathimath Razeena (Financial Controller).

The mission also held discussions with the Maldives Inland Revenue Authority (MIRA) led by Mr. Fathuhulla Jameel Commissioner General of Taxation and Asma Shafeeu (Deputy Commissioner General of Taxation).

The mission delivered a remote workshop providing a hands-on training on tax expenditure models developed for the Maldives. Attendees were a joint team from the MoF and MIRA that is expected to assume the responsibility of estimating tax expenditures. During the workshop, a set of accompanying slides (with details of the models) was delivered. The mission team thanks all attendees for the active participation in the workshop.

The mission team would like to express its sincere thanks to the authorities for the constructive discussions, and to Ms. Hasna Ahmad (head of the Tax Policy Unit at the MoF) for the excellent organization throughout the mission, and to Ms. Zumra Aminath (Director for Planning and Development at MIRA) for facilitating access to data and informative discussions.

Maldives: Technical Assistance Report—Estimating Tax Expenditures
Author: International Monetary Fund. Fiscal Affairs Dept.