The Maldives Inland Revenue Authority (MIRA) has officially submitted a case against the owners of Kaani Hotels, the largest guesthouse operator in the Maldives, for alleged tax evasion. This development has drawn significant attention as it implicates key players in the country’s thriving tourism industry.
Allegations of Tax Fraud
The case, now with the Prosecutor General’s Office, accuses Kaani Hotels of intentional tax fraud spanning nearly four years, from January 2019 to September 2022. MIRA’s findings indicate discrepancies in tax filings for four guesthouses operated by the company in Maafushi:
- Kaani Palm Beach
- Kaani Grand Seaview
- Kaani Village
- Kaani Beach
The audit revealed an estimated USD 800,000 (MVR 13.3 million) in unpaid taxes. The missing amounts were linked to omissions in reporting income from international tour operators and Free Independent Travelers (FITs), specifically in categories like Green Tax, Goods and Services Tax (GST), Business Profit Tax (BPT), and Income Tax.
Key Individuals and Companies Involved
The allegations involve two corporate entities—Kaani Hotels and Tours Pvt Ltd and Asna Investments Pvt Ltd—along with three individuals:
- Abdulla Nasheed, a director of Kaani Hotels.
- Aminath Asima Saleem, another director of the company.
- Aishath Razuna, head of the accounts department.
MIRA asserts that the irregularities were not accidental but rather intentional, with fraudulent information allegedly provided to evade tax obligations.
Kaani Hotels’ Role in the Maldivian Tourism Sector
As a dominant force in the Maldives’ guesthouse industry, Kaani Hotels operates four guesthouses in Maafushi with a total capacity of 490 beds. The company has also been diversifying, developing a 350-bed hotel in Ukulhas and venturing into the resort business by acquiring Bodu Finolhu, the largest sandbank in Vaavu Atoll, for resort development.
In the first four months of 2024, Kaani Hotels reported USD 4.1 million (MVR 64 million) in revenue, making it the highest taxpayer among guesthouse operators. These figures underscore its significant influence in the tourism sector, which remains a cornerstone of the Maldivian economy.
The tax evasion case against Kaani Hotels highlights potential gaps in regulatory compliance within the Maldives’ tourism industry. As guesthouses and resorts continue to thrive, the case serves as a reminder of the importance of transparent financial practices.
For international travelers and local stakeholders, such allegations may cast a shadow over the industry’s reputation, underscoring the need for robust oversight. However, MIRA’s proactive measures demonstrate its commitment to ensuring accountability and maintaining public trust.
As the case progresses, it will likely set a precedent for how tax compliance is enforced in the Maldives. For businesses, this serves as a critical moment to evaluate and reinforce compliance practices, ensuring they align with regulatory standards.
