Male’, Maldives – Former Minister of Islamic Affairs Dr. Mohamed Shaheem has stated today that tax collection is allowed in Islam after claims by current Minister of State for the Islamic Ministry Sheikh Ilyas Jamal that taxation is haram (forbidden in Islam).
Speaking on the matter, Shaheem explained that to fulfill citizens needs and for smooth running of the government, taxation is permissible. He added that taxation is a financial tool accepted by Islamic scholars throughout history.
” It should be the government’s responsibility to use tax in a way that benefits citizens” said Shaheem
The government has introduced income tax this year, with reports by the Ministry of Finance revealing that tax has generated significant amounts in revenue for the administration since January.
Income Tax is levied under the Income Tax Act (Law Number 25/2019). The act was published in the Government Gazette on 17 December 2019 and taxation under the act is set to commence on 1 January 2020. However, remuneration will come within the purview of income effective 1 April 2020. Maldivian citizens are taxed on their worldwide income, whereas non-residents are taxed on the income derived from Maldives.
The 2021 budget also includes multiple new forms of taxes, that were met with mixed public reactions, with plans of introducing congestion tax in Male’ was used to stir up controversy by the opposition coalition earlier this month.