We were honoured to present at Bizweek 2025, hosted by Corporate Maldives, where our team shared insights on one of the most critical yet under-prioritized areas in business today: “Tax strategy and compliance”.

Our session, titled “Tax Strategies for Businesses,” was delivered by our colleagues Zaif and Naifa, who covered practical strategies and timely updates to help businesses in the Maldives manage their tax responsibilities more effectively.

From Planning to Structuring: Zaif’s Insights

Zaif began by laying the groundwork for a more intentional approach to taxation. His key points included:

• Time of Supply Rules: GST is triggered based on invoice or payment; whichever comes first. This can strain small businesses that pay tax before receiving income.
• Prioritizing Tax Planning: Businesses often dedicate entire departments to marketing but treat tax planning as an afterthought. This approach leads to last-minute financial stress.
• Mixed Expense Apportionment: Only the business-related portion of mixed expenses (e.g., business trips with personal components) is deductible.
• Capital Allowances: Businesses can reduce taxable income by accounting for asset depreciation, an opportunity many miss.
• Financial Structuring: Structuring multiple businesses separately can unlock multiple tax-free thresholds, offering real annual savings.
• Tax Due Diligence: Regular internal reviews can prevent penalties and build trust with the tax authority under the self-assessment regime.
• A New Mindset: Businesses should treat tax management as a strategic function, not just a compliance obligation.

Compliance & Clarity: Naifa’s Key Focus Areas

Naifa followed with a strong focus on GST compliance and recent legislative changes, emphasizing how correct application of the law protects not just finances, but also public trust.

• Why GST Compliance Matters: Since GST is collected from customers, failure to pay or report properly can damage a company’s reputation and invite scrutiny.
• Understanding Time of Supply: The timing of GST liability is strictly defined, and misinterpreting this can lead to underpayment or penalties.
• Input Tax Deadlines (G49 Ruling): From February 2024, input tax must be claimed within 12 months, missed periods can’t be recovered.
• Upcoming GST Changes:
  • TGST Increase: From 1 July 2025, the TGST rate will rise from 16% to 17%. Businesses must update billing systems in advance.
  • Staff Café Exemption: Under the 7th Amendment, cafés serving only staff are now exempt from TGST and must register separately under the general sector (8%).
  • Anti-Avoidance Rule: MIRA may reclassify transactions if it suspects misuse of staff-only exemptions.
• Why Record Keeping Matters: Strong documentation helps claim all eligible deductions, avoid penalties, and reduce overall tax burden.

Key Takeaway: Turning Tax into a Strategic Advantage

The core message from our session was clear: tax is not just a year-end task, it’s a strategic function that can unlock long-term value.

With the right planning and guidance, tax becomes a tool to:

• Improve cash flow
• Reduce unnecessary liabilities
• Build regulatory trust
• Support sustainable growth

When handled proactively and transparently, good tax practice does more than ensure compliance, it becomes a competitive edge.