Maldives Tax
Tax in Maldives
Over the few years Maldives economy has grown very much. Various opportunities have been open to investors and small scale business, in Maldives and the income that the government get also has increase in the past years. The tax has also effects many house holds and business. With the changes of laws and regulations there are many new taxes and royalties that are taken in from the public and the business organization. In this essay I am going to highlight the effects of the new tax reform in Maldives. In Maldives the tax administration authority is Maldives Inland Revenue Authority (MIRA). this authority was established as a separate and independent legal entity under the tax administration act which was ratified on 18th march 2010 (MIRA, 2011). Now there are for taxes that is goods and services tax (GST), business profit tax (BPT), tourism tax and bank profit tax. Also there are five fees that are taken. That is tourism land rent, duty free royalty, foreign investment royalty, fuel re-export royalty and re-export royalty. Taxation is the opposite of government subsidy. The effect is to change the behavior of suppliers and consumers by changing the cost of production and there by influencing the market equilibrium and quantity. Generally there are two main types of tax that is direct tax and indirect tax.
Indirect tax An indirect tax is imposed on producers by the government. Examples are excise duties on cigarettes, alcohol, fuel and also value added tax. Tax increases the cost of business causing an inward shift in the supply curve. The vertical distance between the pre-tax and the post-tax supply curve shows the tax per unit. With an indirect tax, the supplier may be able to pass on some or all of this tax onto the consumer through a higher price. This is known as shifting the burden of the tax and the ability of businesses to do this depends on the price elasticity of demand and supply. The diagram below shows the
Over the few years Maldives economy has grown very much. Various opportunities have been open to investors and small scale business, in Maldives and the income that the government get also has increase in the past years. The tax has also effects many house holds and business. With the changes of laws and regulations there are many new taxes and royalties that are taken in from the public and the business organization. In this essay I am going to highlight the effects of the new tax reform in Maldives. In Maldives the tax administration authority is Maldives Inland Revenue Authority (MIRA). this authority was established as a separate and independent legal entity under the tax administration act which was ratified on 18th march 2010 (MIRA, 2011). Now there are for taxes that is goods and services tax (GST), business profit tax (BPT), tourism tax and bank profit tax. Also there are five fees that are taken. That is tourism land rent, duty free royalty, foreign investment royalty, fuel re-export royalty and re-export royalty. Taxation is the opposite of government subsidy. The effect is to change the behavior of suppliers and consumers by changing the cost of production and there by influencing the market equilibrium and quantity. Generally there are two main types of tax that is direct tax and indirect tax.
Indirect tax An indirect tax is imposed on producers by the government. Examples are excise duties on cigarettes, alcohol, fuel and also value added tax. Tax increases the cost of business causing an inward shift in the supply curve. The vertical distance between the pre-tax and the post-tax supply curve shows the tax per unit. With an indirect tax, the supplier may be able to pass on some or all of this tax onto the consumer through a higher price. This is known as shifting the burden of the tax and the ability of businesses to do this depends on the price elasticity of demand and supply. The diagram below shows the