Bill passed for tax to be collected on incomes above MVR60,000

The income tax bill has been passed by the Parliament on Wednesday, imposing tax to be collected on incomes exceeding MVR 60,000.

The bill was passed by the Parliament Committee of the Whole House, with an amendment to the initial draft of the bill which capped the tax free income limit by MVR 40,000. The amendment to increase the limit by an additional MVr 20,000 was suggested by MP Ali Azim of Medhu Henveyru constituency. He also proposed to reduce the percentage of tax to be collected per individual along with the increase of the minimum requirement in income.

The bill passed with the following brackets by all 31 members of the committee;

  • 0% tax on income less than MVR 60,000
  • 5.5% tax on income between MVR 60,000 and MVR 100,000
  • 8% tax on income between MVR 100,000 and MVR 150,000
  • 12% tax on income between MVR 150,000 and MVR 200,000
  • 15% tax on income exceeding MVR 200,000

It is estimated that the government would receive MVR 600,000 in income taxes during 2020.