Friday
22nd Nov 2024
Dhivehi Edition
Finance minister Ibrahim Ameer with economic minister Fayyaz Ismail
Maldives Association of Tourism Industry (MATI) and the Guesthouse Association expressed concerns over the increased tax rates proposed to the parliament, calling it damaging to the businesses and tourism sector.
The tax bill proposed by the government attempts to raise Goods and Services Tax (GST) and Tourism Goods and Services Tax (TGST) rates from 6 percent and 12 percent to 8 percent and 16 percent, respectively, effective January 2023. The government's proposal is being appraised by the Parliament Committee of the Whole House.
Upon receiving summons by the Committee for the amendment appraisal, MATI responded in a letter that the association did not believe it to be the best time to raise tax rates while the tourism industry attempts to overcome various obstacles.
Additionally, MATI requested to allow a minimum of 12 months before any amendments to the tax bill is implemented.
The Committee of the Whole House summoned representatives of the Guesthouse Association, today, as well.
In response to the possible outcome of increased tax rates on guesthouse businesses, the Financial Controller Hassan Ali Manik said that guesthouse businesses will suffer great loss if TGST increases. He said that they expect the demand to fall by 20 to 25 percent because the biggest competitors to the Maldivian guest house businesses take a lower TGST.
Hassan highlighted that the guest house businesses are still recovering from the impact of Covid-19 pandemic in addition to the Ukraine War and had been expecting a tax reduction rather than a tax increase.