Businesses that do not contest tax bills issued by the tax authority within a 30-day appeal period cannot challenge the claim at the courts at a later stage, even if the bill is incorrect, the high court has ruled.
In a landmark ruling on May 9, the appeals court ruled that the Maldives Inland Revenue Authority did not have to return US$247,954 seized from a real estate company because the company had not challenged MIRA’s tax bill within the specified appeal period.
MIRA had sought the central bank’s intervention in 2013 to freeze the accounts of Bunny Holdings and seize money owed as TGST.
Bunny Holdings took its case to the tax tribunal, claiming the tax bill was incorrect, as its business transactions – relating to the leasing of a water-villa at luxury resort Soneva Fushi – did not qualify for TGST.
The villa was leased for a period of 35 years, beginning in 2011.
The tax tribunal ruled in Bunny Holdings’ favour, and ordered MIRA to return the money.
The high court, however, ruled that businesses lose the right to challenge the validity of tax bills if they do not appeal the claim through MIRA’s appeal procedures
The ruling said Bunny Holdings had filed the appeal only after the company’s accounts were frozen and the money seized. The company’s failure to utilise the 30-day appeal period to contest the claim amounted to an acceptance of the tax bill.
The verdict was issued by Judges Ali Sameer, Sujau Usman and Abdulla Hameed.