MIRA Takes Legal Action Over MVR 200M GST Dispute in Dharumavantha Hospital Project

A fresh legal dispute has emerged surrounding the Dharumavantha Hospital project, as the Maldives Inland Revenue Authority (MIRA) moves to recover MVR 200 million in Goods and Services Tax (GST) from Singapore-based Chang Hua Construction, the main contractor behind the landmark 25-storey building.

The issue has landed back in the Civil Court, adding another chapter to an ongoing legal battle that pits the State, its tax authority, and an international construction firm against each other.

A High-Value Project with Tax Disputes

The construction of Dharumavantha Hospital, one of the tallest and most prominent healthcare facilities in the country, was initiated during former President Abdulla Yameen's administration. The total cost of the project was set at USD 140 million and was awarded to Chang Hua Construction.

Following the project’s completion, a dispute arose over whether the contract value included GST. Chang Hua Construction took the matter to the Civil Court, arguing that the USD 140 million only covered the construction work, excluding taxes, and requested a formal declaration that the government should be responsible for covering the GST due to MIRA.

In March 2024, the Civil Court ruled in favor of the company. The court stated that, based on the original contract and amendments made in 2018, the project cost was clearly defined as USD 140 million exclusive of GST or any additional taxes. The judgment ordered the Government of Maldives to pay the GST owed on the project and also instructed authorities to reimburse MVR 227,000 previously paid by Chang Hua Construction to MIRA.

State Pushes Back, Files Appeal, and MIRA Takes Action

While the government has since appealed the Civil Court’s ruling at the High Court, MIRA has taken a separate but related step—filing its own claim at the Civil Court to collect MVR 200 million in unpaid GST and associated penalties from Chang Hua Construction.

The construction firm objected, arguing that the Civil Court had already determined it was not liable to pay the tax. According to their defense, it remains the responsibility of the government to settle the amount with MIRA.

However, MIRA countered in court by citing the same ruling. The tax authority argued that while the contractor must pay GST directly to MIRA under the law, the company can then seek reimbursement from the government, as indicated by the Civil Court's earlier verdict. The authority emphasized that GST must first be paid to MIRA before any reimbursement process can begin.

This week, the Civil Court ruled that MIRA’s case is valid and can proceed.

Ongoing Legal Uncertainty

As both sides prepare for the next stage in this complex case, the High Court has issued an interim order temporarily halting the reimbursement of the MVR 227,000 to Chang Hua Construction.

The outcome of the appeals and the new Civil Court proceedings could have broader implications for how future government contracts are structured in the Maldives—particularly with regard to tax liabilities in high-value foreign agreements.

For now, the GST battle between MIRA, the government, and Chang Hua Construction is far from over.