Government to offset SME taxes against money it owes and waive duty on raw materials

President Dr Mohamed Muizzu has decided to let small and medium enterprises (SMEs) offset their tax against money the government owes them, and to remove duty on raw materials they import. He announced the measures last night in his speech at the opening of Maldives Expo 2026.

The President said late payment by the government to SMEs carrying out its work is a major problem for those businesses when it comes to paying tax. He said the decisions were made after consultation to solve that problem.

Under the offset system, the tax a business owes will be deducted from what the government owes the business, and the rest is settled from there. If the government owes a company more than the tax due, the company will not have to pay tax that time, and the government will pay the remaining balance to the company. If the tax due is larger than the amount the government owes, the company pays only the difference.

The President said this will greatly reduce the amount small businesses have to pay and give them considerable relief.

GST registration threshold

The annual threshold for GST registration will rise from MVR 1 million to MVR 1.5 million, the President said. God willing, it will take effect from 1 January 2027. He said the government will make the needed changes to laws and regulations in the coming days.

Raw material duty

A special list of raw materials imported by SMEs will be drawn up, and duty on the items on the list will be waived for five years from January 2027.

Payments from overseas

Closing his speech, the President said the government has noted the difficulties that locally made goods and small businesses face in receiving payments from outside the Maldives. He said the government is preparing to make major changes to remove those obstacles and is working on it now.