The Parliament of the Maldives has approved the amendment bill to the Small and Medium Enterprises (SME) Act, which revises the classification of SMEs.
The bill was submitted by MP Ali Riza to provide a clear classification of SMEs following the implementation of minimum wage under the new Employment Act, which allocates different minimum wage amounts for different classes of SMEs.
According to the bill, a business is classified as a micro business if the number of staff is between 0-5, the total income is below MVR 1,000,000 and net profit is below MVR 250,000. A business is classified as a small business if the number of staff is between 6-30, total income is between MVR 1,000,001 – MVR 10,000,000 and net profit is between MVR 250,001 – MVR 2,500,000 Meanwhile, a business can be classified as a medium-sized business if number of staff is between 31-100, total income is between MVR 10,000,001 – MVR 30,000,000 and net profit is between MVR 2,500,001 – MVR 5,000,000.
The committee report noted the change of classification was deemed necessary as small changes could alter the classification of the business, which complicates matters related to taxes and wages.