News Desk
A power outage inside the People’s Majlis forced the suspension of today’s sitting right as lawmakers were locked in a fiery debate over foreign investment and tax loopholes.
The blackout hit at noon, shortly after the session resumed for its second slot. South Hulhumalé MP Dr. Ahmed Shamheed (MDP) had just finished speaking on his resolution demanding a halt to the government’s newly proposed “Pearl Residence Visa” program for foreign investors. The sound system cut out completely the moment Velidhoo MP Ahmed Abbas (MDA) took the mic, forcing the leadership to pause proceedings.
A Majlis media official confirmed that a technical fault caused the blackout, but noted sittings were expected to resume by 1:00 PM.
Before the power cut, the chamber was heavily focused on government-backed amendments to the Income Tax Act. The bill, introduced by Mathiveri MP Hassan Zareer (PNC), proposes doubling the withholding tax on payments made to non-resident foreign contractors from 5% to 10%.
PNC Parliamentary Group Leader and Inguraidhoo MP Ibrahim Falah defended the tax hike, arguing that foreign companies currently exploit legal loopholes to claim heavy losses and dodge paying their fair share to MIRA.
“Under the current setup, foreign contractors pay 5% withholding tax, but they end up claiming back money by abusing provisions in the law,” Falah said. “With this amendment, no foreign company will be able to pack up and leave the Maldives without paying a fixed, mandatory rate.”
Falah claimed that under the proposed rule, a foreign firm developing a USD 100 million resort would be legally required to pay USD 10 million in taxes to the state, leveling the playing field for local contractors.
Opposition members were quick to fire back, accusing the government of squeezing local businesses while making backroom deals with foreign interests.
Kendhoo MP Mauroof Zakir (MDP) mocked the administration’s financial record, pointing out that those currently in power once dubbed MDP’s tax system un-Islamic, yet are now scrambling to raise taxes across the board.
“This government assumed power promising no new taxes, claiming they would only expand the tax base,” Mauroof said. “Now that the economy is sliding, all we see are new tax hikes because they simply don’t know how to expand that base.”
Mauroof also took aim at Special Economic Zones (SEZs), alleging that the government is selling off vast stretches of Maldivian territory to foreign parties for township projects where developers pay a paltry 1% tax rate. Meanwhile, he noted, local contractors are left chasing the state for millions in unpaid dues.
Echoing similar concerns, Vaikaradhoo MP Hassan Ziyad (MDP) warned that hiking withholding taxes on foreign contractors could backfire on small and medium enterprises (SMEs) and the guesthouse industry.
“Foreign firms will just re-register locally to dodge this tax,” Ziyad said, stressing that major state contracts—from youth centers to public housing—are still routinely handed to foreign contractors over local builders. “Our local companies aren’t getting paid, and they are sinking into bankruptcy.”
Ziyad urged the government to stop rushing major tax legislation through late-night sessions without proper economic studies, adding that ordinary citizens are paying inflated prices for land while foreign buyers enjoy massive tax breaks.
Hanimaadhoo MP Abdul Ghafoor Moosa (MDP) pointed out that pass-through legislation is useless if laws aren’t properly enforced.
“The government claims the economy is recovering, but the public hasn’t felt a single positive change in their wallets,” Ghafoor said, noting that ordinary Maldivians are now forced to buy US Dollars at black-market rates exceeding MVR 22.50.
Ghafoor urged both sides of the aisle to drop the political posturing and focus on national interest, warning that passing dozens of un-enforced bills will never fix the country’s fiscal drain.
