Maldives political turmoil - was this a tax coup?

The last-but-one edition of the UK satirical (but highly respected) publication Private Eye has an article about the Maldives, explaining how the Maldives' first freely-elected president Nasheed sent four bills to parliament, including corporate and income tax legislation that would have required those earning above £6,000 per year to pay tax for the very first time.

Previously, resorts had paid only a nominal fee for each bed, with no requirements for verification.

Nasheed was overthrown in a coup in February by a military-backed and increasingly Islamist regime, whose leadership has extremely close links to Maldives tourism tycoons.

Since the coup, Private Eye reported, the tax bills have been buried and there seems to be no interest in pushing them through.

"The reality is that the Maldives - already favoured by footballers, Russian Gangsters and off-duty Israeli arms dealers . . . has given us an unlikely alliance between hoteliers promoting bikini-clad, cocktail-fuelled luxury and a government that incldues two imams, wants to bring back the death penalty . . hundreds have been arrested since the coup, and Amnesty has repeatedly expressed concern over police brutality and impuity. Journalists are being beaten up, and violent crimes, including murder, have risen sharply.

But at least the evils of income tax are off the agenda."

For more on the tourism sector and taxation, we have just also uploaded a very different but nevertheless interesting short case study on tax, tourism and the Dominican Republic. More on that, too, on our transfer pricing page.

(As an aside, the Private Eye page also carries a letter pointing out that "Mitt Romney" is an anagram of My, I'm Rotten.")