Strong Financial Sector Performance Drives 51% Growth in Bank Income Tax Revenue in 2024

A notable surge in income tax collected from banks has been recorded in 2024, with the Maldives Inland Revenue Authority (MIRA) reporting a 51.9% increase compared to the previous year. This substantial growth reflects the robust expansion of the country’s financial sector and underscores improved fiscal performance within the banking industry.

According to MIRA’s 2024 Annual Report, total revenue from bank income tax reached USD 90.8 million, far surpassing the initial forecast of USD 64.4 million. This outcome represents a 48% increase over the projected figure and a 51% rise from the actual revenue of USD 62.7 million collected in 2023.

Under the Maldives’ Income Tax Act, all commercial banks licensed under the Maldives Banking Act, regardless of whether they are resident entities, are subject to a flat tax rate of 25% on their taxable income. These institutions are treated as distinct taxable persons under the law, separate from other sectors or operations.

The exceptional rise in tax revenue is directly linked to the financial sector’s economic performance. The report highlights that the sector’s contribution to the national Gross Domestic Product (GDP) increased by 8.88% in 2024, a key factor considered in the estimation of bank income tax revenue. MIRA typically calculates these estimates based on historical revenue averages alongside the projected GDP growth of the financial industry.

This positive fiscal outcome signals healthy profitability within the banking sector and stronger enforcement of tax obligations. It also reflects the government’s broader economic management efforts and strategic oversight of financial institutions, reinforcing investor confidence and contributing to public finance sustainability.

The sharp increase in tax revenue from banks forms a critical part of the national budget, supporting infrastructure development, social programs, and public service enhancements. As tourism remains the primary driver of the Maldives’ economy, a well-capitalized and efficiently taxed financial system ensures long-term resilience and fiscal stability, factors that continue to strengthen the country’s appeal as a reliable investment and tourism destination.