Two companies prominently associated with providing PCR testing during the Covid-19 pandemic; Pioneer Maldives Private Limited (Business Registration No. C08162020) and Island Health Solutions Private Limited (Business Registration No. C-0382/2010) have been forwarded to prosecution based on allegations of Tax Evasion by MIRA. The investigation was initiated as the Income Tax declarations of these taxpayers were found to be significantly low despite being market leaders during the pandemic.
During MIRA’s investigation it was identified that apart from failing to declare correct revenue related to PCR Testing, Island Health Solutions Private Limited had also failed to declare full revenue generated from operation of activity “Pearl Medical Centre” clinic and other medical related services provided by the company during Tax years 2020, 2021 and 2022.
Furthermore, Pioneer Maldives Private Limited, despite being one of the foremost service providers in PCR Testing and being widely associated with providing PCR testing services to tourist facilities during 2020 and 2021; have not declared full revenue generated from PCR testing in their Financial Statements and Income Tax Returns filed to MIRA. Investigation also revealed that Pioneer Maldives Private Limited had claimed falsified Cost of Sales and Administrative Expenses in the financial statements of tax year 2021 to reduce tax liabilities resulting from extraordinary revenue generated from highly demanded PCR testing during the period.
Based on MIRA’s investigation findings, a total of MVR 31.9 million of undisclosed Taxable income related to tax years 2020, 2021 & 2022 was observed by Island Health Solutions Private Limited, while a total undisclosed Taxable Income amounting to MVR 102.7 million for Tax Years 2020 & 2021 has been identified for Pioneer Maldives Private Limited. Audits related to these investigations have resulted in an Additional Tax of MVR 4.3 million and 23.7 million for Island Health Solutions Private Limited and Pioneer Maldives Private limited respectively.
In addition to filing charges against both these companies, MIRA has also requested Prosecutor General’s Office to file charges against Dr. Ikleel Shareef who is identified to be a Director of both companies and Dr. Ali Abdulla Latheef, a Director of Island Health Solutions Private Limited as the main perpetrators involved in the case. Furthermore, MIRA has also requested to file charges against Ali Fayaaz, who was engaged as the person responsible for preparing the Financial Statements and Income Tax Returns for these Tax years, on the allegation of knowingly preparing Financial Statements and Income Tax Returns based on falsified information.
Under Section 64 of the Tax Administration Act, it is an offense to commit any acts, knowingly, intentionally, and with intention to evade, or with the intention to facilitate a taxpayer to evade tax payable under a tax law. MIRA is committed to taking action against such offenses as part of its "Tax Crime Mitigation Strategy," aimed at regulating responses to these offenses.
Members of the public who wish to report suspected tax-related offenses or other misconduct are encouraged to do so through the “MIRA 918 Offence Reporting Form,” available on MIRA’s website under the “Whistleblowing” function.
Related Documents:
Tax Crime Mitigation Strategy - MIRA - Maldives Inland Revenue Authority