Member of Parliament for Guraidhoo constituency and Deputy Leader of PPM Mohamed Gassaan Maumoon shared his reasons for opposing the government proposed tax bill to increase the tax rates.
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.
Tweeting on the government’s tax bill, Gassaan stated that increasing the GST will simultaneously collide with the reduction in global crude oil production and aggravate the domestic inflation.
Additionally, while the Guesthouse Association of the Maldives (GAM) and Maldives Association of Tourism Industry (MATI) have repeatedly protested the TGST spike, it is believed to lose the tourism industry bookings, and therefore earnings.
Gassan claimed that the decision will affect small businesses greatly because while large enterprises are offered deferred payment schemes by the government, SMEs were not and called it a failure of the government in collection of earned income.
Gassaan imposed the requirement for reliable and rigorous measures to curb budget deficits and revitalize the economy, stating the government’s inability to enforce contractionary fiscal policies and failure to minimize state expenditure. He noted that the reality of the situation was far from the campaign pledges, signifying the extensive number of political appointments and the elaborate presidential travels.
Highlighting at the current administration’s inability to acquire foreign funds for the past two years, Gassaan stated that the government has run out of the possibility of further borrowing and has reached 113 percent of debt to GDP ratio. Taking this into account, Gassan reasoned that increasing taxes will be ineffective.
Gassaan proclaimed that the government is headed towards bankruptcy and sovereign default. He contended the the general publish should not be asked to bear the cost of the government’s mismanagement of the economy.