President announces major SME relief package, designates Addu City as first concession zone

President Dr Mohamed Muizzu has designated Addu City as the first zone under the government’s new policy of dividing the country into economic zones and granting special concessions to small and medium enterprises (SMEs). 

The announcement was made on Saturday evening at the Maldives Expo 2026 Awards Ceremony.

Speaking on the decision, the President said SMEs operating in Addu will receive special concessions for three years starting from 1 January next year. He said the move aims to boost Addu’s economy, expand business activity and increase employment opportunities for residents.

The reliefs available to businesses in Addu include:

• Full waiver of rent for businesses operating on leased government or state land.  

• Exemption from BPT and income tax.  

• Significant reductions in annual quota fees for foreign employees.  

• Waiver of annual fees for vehicles imported for business use.

The President said the Economic Ministry will announce further details soon.

He also highlighted broader challenges faced by MSMEs nationwide, particularly delays in government payments that have made it difficult for small businesses to meet tax obligations. To address this, the government has decided to offset taxes payable by MSMEs against outstanding payments owed to them by the state.

ދިވެހީންގެ އުފެއްދުންތެރިކަމުގެ މައުރަޒު 2026ގެ އިނާމު ދިނުމުގެ ރަސްމިއްޔާތުގެ ތެރެއިން https://t.co/18tvZQO7ZP

— The President's Office (@presidencymv) October 24, 2026

“We have discussed and decided to offset the taxes payable by various businesses in the MSME sector. This means the government will pay the amount of taxes owed by the MSMEs,” he said.

He explained that if the amount owed by the government to a company exceeds its tax liability, the company will not have to pay tax, and the remaining balance will be released. In cases where the tax payable is higher, the company will pay only the remainder after deduction. The President said the change will significantly reduce the financial burden on small businesses.

In addition, the annual GST registration threshold will be increased from MVR 1 million to MVR 1.5 million from 1 January. “We will bring the necessary changes to laws and regulations in the near future,” he said.

The President also announced that a special list of raw materials imported by MSMEs will be exempted from duty for five years starting next year. He said the government has identified difficulties in accessing foreign funds for Maldivian products and small businesses, and is preparing to remove obstacles in this area.