President ratifies 2nd Amendment to Income Tax Act

President Dr Mohamed Muizzu has ratified the 2nd Amendment to Law Number 25/2019 (Income Tax Act).

The Bill was passed at the 27th sitting of the second session of the People’s Majlis this year, held on Sunday, 23 August 2026. The President ratified the Bill at a special ceremony held at the President's Office today.

The Amendment increases the withholding tax deducted from payments made to non-resident contractors undertaking construction projects in the Maldives from five per cent to ten per cent. It also stipulates that this amount shall constitute the full and final tax liability payable by such contractors. The objective is to ensure fair and competitive conditions between Maldivian businesses and non-resident contractors.

The Amendment also further defines the term “non-resident contractor” for the purposes of the Act. As a result, the administrative process for filing tax returns for non-residents will be simplified.

The Amendment has been published in the Government Gazette and is now in effect.