The Maldivian government has introduced a new mechanism allowing businesses to offset unpaid taxes owed to the Maldives Inland Revenue Authority, MIRA, against outstanding payments due from government institutions.

According to a joint announcement by the Ministry of Finance and the Ministry of State-Owned Enterprises, businesses that have not received payments from government institutions can apply to MIRA to have the outstanding amounts offset against their tax liabilities.

The initiative gives priority to unpaid bills submitted by small and medium-sized enterprises, helping businesses manage their cash flow and recover money owed to them by the government.

Under the arrangement, if a business’s outstanding tax liability exceeds the amount the government owes it, the tax will be deducted from the government payment, and the business must settle the remaining balance with MIRA.

However, if the amount owed by the government exceeds the business’s tax liability, the outstanding tax will be deducted first, and the government will pay the remaining amount to the business.

The Ministry of Finance says businesses seeking to use the mechanism must submit an application to MIRA, together with details of the outstanding payments, in accordance with the established procedures.