The Maldives recorded USD 88.85 million in income tax revenue during the first two months of the year, reflecting a strong 41.1 percent increase compared to the USD 63.26 million collected during the same period in 2025. According to data released by the Maldives Inland Revenue Authority, the growth highlights a notable expansion in the country’s direct taxation revenue stream and reflects continued economic activity across key sectors of the Maldivian economy.
The rise in income tax collections was largely supported by the performance of corporate and non-individual income taxes, which remain a core component of the Maldives’ fiscal revenue structure. These categories contribute significantly to the government’s overall revenue framework and play an important role in supporting national development initiatives, public services, and infrastructure investments. Despite the overall positive trend, taxes specifically levied on companies and other non-individual entities recorded a modest contraction of approximately 7 percent during the period. Collections from this segment reached USD 41.23 million, compared with USD 44.36 million recorded during the corresponding period in the previous year.
However, the decline within this segment was offset by a sharp increase in tax receipts from non-residents and temporary residents operating within the Maldives. Revenue generated through non-resident withholding taxes surged significantly, reaching USD 11.74 million during the opening months of the year. This figure represents an increase of approximately 200 percent compared to the same period in the previous year, demonstrating the expanding economic engagement of foreign businesses, professionals, and service providers participating in the Maldivian economy.
The income tax system in the Maldives operates under the framework of the Income Tax Act, which was introduced to broaden the national revenue base and strengthen fiscal sustainability. The legislation’s main provisions came into effect on 1 January 2020, marking a significant development in the country’s taxation structure. Subsequently, the employee withholding tax, which applies to wages and remuneration earned by employees, was formally implemented on 1 April 2020, further enhancing the government’s ability to manage and regulate income-based taxation.
Under the provisions of the Income Tax Act, individuals classified as residents are required to declare and pay taxes on their global income, while non-residents and temporary residents are taxed only on income generated within the Maldives. This structure ensures that the country is able to capture revenue from economic activities conducted domestically while maintaining an internationally aligned taxation framework.
The increase in income tax collections during the first months of the year reflects the resilience and continued expansion of economic activity in the Maldives, particularly in sectors that involve international participation. As the country remains one of the world’s most prominent tourism destinations and a growing hub for global business partnerships, the steady strengthening of direct tax revenues underscores the role of effective fiscal policies in supporting long-term economic stability and sustainable national development.
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