The Maldives Inland Revenue Authority (MIRA) has requested the Prosecutor General’s Office to pursue prosecution against two private companies that provided large-scale PCR testing services during the COVID-19 pandemic, citing alleged tax evasion.

MIRA’s investigation found significant income underreporting for tax purposes by Pioneer Maldives Private Limited and Island Health Solutions Private Limited, two of the leading PCR testing service providers during the pandemic.

Island Health Solutions provided PCR testing services during the 2020, 2021 and 2022 tax years and also generated income through its subsidiary, Pearl Medical Centre. However, the authority said the company failed to declare its full income from these services.

Pioneer Maldives was among the first companies to introduce PCR testing services in the Maldives and provided these services extensively to the public and tourist establishments in 2020 and 2021. According to MIRA, tax audits found that the company had claimed inflated cost of sales and administrative expenses in its financial statements with the intention of reducing its taxable income.

For the tax years 2020 to 2022, Island Health Solutions failed to report taxable revenue amounting to MVR 31.9 million, while Pioneer Maldives failed to declare taxable revenue of MVR 102.7 million. Following the audits, Maldives Inland Revenue Authority ordered Island Health Solutions to pay additional tax of MVR 4.3 million, while Pioneer Maldives was ordered to pay MVR 23.7 million.

In addition to the companies, MIRA has requested the Prosecutor General’s Office to pursue charges against Dr Ikleel Shareef and Dr Ali Abdulla, who served as directors during the period under investigation, in connection with the alleged tax evasion. MIRA has also sought prosecution against Ali Fayyaz, who prepared the financial statements and tax returns of both companies, on the allegation that incorrect information was knowingly submitted.

MIRA noted that intentionally evading tax payments or assisting in such acts constitutes an offence under Article 64 of the Tax Administration Act. The authority said it will take action against individuals and entities found to be involved in tax offences, fraud or deception in line with its Tax Crime Mitigation Strategy.