Introduction

The Waste Management Act (Act No: 24/2022) was enacted by the President and published in the Government Gazette on 18th December 2022. Pursuant to Section 32 and 33 of the Waste Management Act, all businesses operating in the Maldives are required to charge MVR 2 per plastic bag being sold or provided to their customers commencing from 18th April 2023. 

Section 35 of the said Act requires the Maldives Inland Revenue Authority (MIRA) to issue a regulation on collecting plastic bag fee by persons registered for GST within 3 months from the enactment date. MIRA issued the Regulation on Collecting Plastic Bag Fee by Persons Registered for GST (Regulation No: 2023/R-76) (hereafter “Plastic Bag Fee Regulation” or “Regulation”) on 22nd February 2023.

This Regulation is to be read along with: -

• Waste Management Act;
• Goods and Services Tax (GST) Act (and GST Regulation); and
• Tax Administration Act.

Calculation and collection

Fee	MVR 2 per bag This is applicable even on plastic bags provided with a good or service exempt from GST or GST zero-rated. It is the duty of GST registered business owners to collect plastic bag fees from customers. Even if a person required to register for GST fails to do so, if they supply plastic bags, plastic bag fee will be applicable.
Commencement date	00:00 hours on 18th April 2023.
Determination of point on which plastic fee is obligatory	Plastic bags sold at point of sale: GST time of supply of the plastic bag. Plastic bags provided* at point of sale: GST time of supply of good or service supplied along with plastic bag. GST time of supply for a good or service exempt from GST shall be calculated by considering it as a taxable supply. *Provided: supplied without selling

Payment

Even if a customer returns a plastic bag on the returning of the good or service supplied along with it, the plastic bag’s fee will be collected by MIRA.

Business owners have to declare the amount they collected as plastic bag fee in their GST returns in Maldivian Rufiyaa, and pay the same to MIRA. This declared information can be amended via an amendment to the particular GST return.

If a person charges a plastic bag fee higher than the actual amount, or on a bag that is exempted, the whole amount will be collected by MIRA unless it has been refunded to customer.

Penalties

• For failure to submit plastic bag fee information: fine of 0.5% of the amount of plastic bag fee payable for the specific period + a fine not exceeding MVR 50 for each day of delay.
• For failure to pay plastic bag fee: a fine of 0.05% per day of the outstanding amount from the due date till date.

Record-keeping

The following documents shall be maintained in collecting plastic bag fees: -

• Documents under s.27 of the Tax Administration Act;
• Details of plastic bags purchased;
• Details of plastic bags received free of charge;
• Details of plastic bags sold;
• Details of plastic bags supplied free of charge;
• Details of plastic bags damaged; and
• Details of plastic bags returned by customers.

Exceptions

Under chapter 8 of the Waste Management Act, the following plastic bags are exempted from plastic bag fee: -

• Plastic bags supplied by duty free shops;
• Unsealed plastic bags used in storing fresh fish; and
• Binliners (plastic bags supplied by waste management service providers to dispose waste in).