Member of Parliament for Machchangoalhi Uthuru constituency, Mohamed Rasheed (Boadhigu) declared that he do not support the bill to increase tax rates in the Maldives and despite the consequences, he will not be voting to approve the bill.
Mohamed Rasheed’s declaration comes in response to the three-line whip issued by MDP to approve the increase of tax rates, in the midst of an ongoing dispute between MDP parliamentary group members regarding the tax rate bill. MDP Parliamentary Group Leader Mohamed Aslam asserted that members who vote against the tax rate bill and defy the three-line whip will be subject to necessary ramifications.
Mohamed Rasheed’s tweet apologized for his transgression from MDP members, but assured that he will be going against the three-line whip anyway. He said that he welcomed all consequences of his disobedience and since he did not believe this to be the right time to increase tax rates, he will not be contributing to the decision.
Many parliamentary members have taken issue with the tax rate bill proposed to the parliament.
Member of Parliament for the Henveiru Medhu constituency, Ali Azim, expressed his concerns on Twitter. Azim said in his tweet that following the conflict in committee regarding increasing the tax rates to boost state income, the three-line whip has been issued to approve the bill as it was presented while no discussions have taken place with the Finance Minister, business owners or the tourism sector. Azim called the ordeal “fearsome and tyrannous”.
The tax bill proposes to raise GST and TGST rates from 6 percent and 12 percent to 8 percent and 16 percent, respectively.
The government’s decision to raise tax rates comes after the International Monetary Fund (IMF) had advised against increasing tax rates before 2024, only after the state of the current inflation rate sorts itself out.
According to a report published by IMF on September 16, 2022, on the subject of refining GST in the Maldives, increasing the GST rate at a time where the cost of goods and services are climbing higher and higher on the global market cannot be beneficial.
Even advocates of the tourism industry have expressed their concerns with respect to the government's plans to increase GST and TGST rates.