Introduction

On 18 December 2022, Waste Management Act (“Act”) was ratified and published in the Government Gazette. The Act governs implementation and enforcement of a sustainable waste management system in the Maldives to minimize the impact on the environment and public health by increasing awareness and responsibility. The Act also levy a fee on plastic bags sold or provided by a business operated in the Maldives at point of sale, commencing from 18th April 2023.

The Maldives Inland Revenue Authority (“MIRA”) issued the following two regulations on collection and settlement of plastic fee collected by business registered for GST. 

1. Regulation on Collecting Plastic Bag Fee by persons Registered for GST issued on 22 February 2023. 
2. Plastic Bag Fee Record Keeping Regulation issued on 17 April 2023. 

This memo highlights the key obligations on collection and settlement of plastic bag fee by businesses registered for GST.

Who should charge fee on plastic bags and when should it be charged?

Every business must charge a fee on plastic bags being sold or provided to the customers. This fee must be charged from 18 April 2023 onwards.

How much should be charged for each plastic bag sold or supplied?

MVR 2 must be charged for each plastic bag being sold or provided. The term “plastic bag” includes bags used for carrying goods, (including bags made of oxo-degradable, synthetic polymers or degradable plastic bags). 

Are there any exemptions?

Businesses are not required to charge the fee on plastic bag in the below circumstances.

1. Plastic bag sold and supplied in duty-free shops.
2. Plastic bag used to carry all kind of unsealed fresh fish
3. Bin liners exclusively sold or supplied for waste management service providers or any other relevant authority.
4. Plastic bag used by the manufacturer of a good for the packaging necessary for the sale of such a good. 

What are the filing and payment requirements for the fees collected on plastic bags?

Businesses registered for GST are required to declare fees collected from plastic bags in their periodic GST returns and settle within the GST filing and settlement deadline.

Are there any documents to be maintained?

Yes, Plastic Bag Fee Record Keeping Regulation issued on 17 April 2023 provides a detailed guidance on the record keeping requirements for all businesses except those who are registered for GST. However, the list provided in the regulation can be used as a guideline by Businesses registered for GST in maintaining proper records on plastic fee collected.

Businesses not registered for GST are required to maintain relevant records from 18 April 2023 on a daily basis. These records must be maintained in Dhivehi or English and must be stored in the business premises. 

The following list of records are to be maintained by the businesses on all plastic bags sold / provided to their customers.

1. Number of plastic bags sold, and price charged.
2. Number of plastic bags supplied free of charge.
3. Number of damaged plastic bags, and cost.
4. Number of non-plastic bags sold or supplied free of charge.
5. Details of returned plastic bags.

The following information are to be maintained by the business on all plastic bag purchases by such business.

1. Name and Address of the Supplier.
2. TIN of the Supplier if they are registered at MIRA.
3. Number of Plastic Bags being bought and provided fee of charge by the supplier.
4. Receipt or Invoice issued by the supplier on such transactions.

Additionally, all businesses are required to maintain proper records of all plastic bags imported by such businesses. 

Other Findings

Due to the increased concerns from the public, the government has proposed an amendment bill to the Waste Management Act on 27th March 2023. The following amendments proposed in the amendment bill are expected to have an impact on collection and payment of plastic bag fees.

1. Sale of plastic bags in packs of 50 or more is exempt from plastic bag fees.
2. Plastic bag fees collected by those businesses who are not registered for GST is required to spend the fees collected in accordance with the regulation issued by the Ministry (the Ministry is required to issue the regulation within 9 months from the enactment of the amendment bill).