UNDP Maldives

TIWB launched its programme in the Maldives in August 2018 with support from the UNDP Maldives Country Office (CO), to help mobilise more domestic resources for the country. The programme focuses on building the revenue authority’s tax audit capacities to audit multinational enterprises more effectively, in the areas of transfer pricing, thin capitalisation, application of tax treaties, and audit related aspects of international exchange of information. 

The Maldives is a typical example of the ‘island paradox’ with multi-dimensional development challenges. On the one hand, the country has made significant development progress. Gross National Income (GNI) increased by over 200% between 1990-2015, and human development indicators such as life expectancy at birth improved by 15.6 years over this period. The country graduated to middle-income status in 2011. On the other hand, the country grapples with challenging macro-economic fundamentals: a high fiscal deficit, high public debt levels, a narrow economic and tax base, and weak public financial management systems, amongst others. This is combined with gender inequalities and a high vulnerability to climate change; the Maldives has amongst the highest climate adaptation costs in the world as a proportion of GDP. In this context, an important objective in the Maldives is to increase domestic resources.

"Domestic resources are crucial for a small-island developing state such as the Maldives, to finance the Sustainable Development Goals. TIWB assistance comes at an opportune time, given the government’s efforts to mobilise increased resources to deliver on its national plans. TIWB continues to be a key offering under the UN’s financing for sustainable development umbrella."

Nasheeth Thoha, (Former) Deputy Resident Representative, UNDP Maldives

The UNDP Maldives CO provided in-country support for setting up the TIWB programme by helping raise awareness with key decision-makers at the national level. It helped to build political support for the initiative. It was also instrumental in providing the TIWB expert with an overview of the overall  evelopment landscape in the country. The CO helped put TIWB into context with respect to the government’s national development plans. It also helped contextualise how TIWB’s work fits under the broader umbrella of the United Nations development assistance programme in-country.

For example, one of the key areas of assistance for the UN in the Maldives is governance, which includes building stronger, more transparent and more effective institutions, in addition to improving access to finance. TIWB furthers these priorities by strengthening the organisational capacities of tax  administrations and mobilising finance for sustainable development. UNDP also assists in the area of SDGs based budgeting.

UNDP Maldives CO also connected the expert to key national stakeholders and decision-makers, and facilitated coordination between various donors in-country to bring in more synergies between the efforts of different donors in the public financial management space. For example, meetings set-up by the CO with the Asian Development Bank and World Bank fiscal teams in-country helped the TIWB expert to understand the range of taxation assistance received by the Maldives and situate TIWB assistance and future recommendations accordingly. Lastly, the CO offered to liaise with the government for follow-up on the expert’s recommendations, including fostering policy dialogue on tax issues and supporting broader tax reforms in the country.