Wednesday
24th Apr 2024
Dhivehi Edition
President Solih and MMA's governor Ali Hashim. Photo: TMJ
The Central bank, Maldives Monetary Authority (MMA) has called on the government to work on reducing state expenses rather than increasing tax rates.
In an advisory letter sent by MMA to the parliament, regarding the budget proposed for 2023, MMA stated that the budget proposed by the government does not achieve the goal of reducing budget deficit indicating that it was an excuse used by the government to sell the tax bill proposed to the parliament.
MMA stated that rather than increasing tax levy to ride the fluctuation of cost of goods in the market, the government should focus on the importance of reducing expenses by analyzing past expenditure reports to strategize best possible cost saving methods.
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.
MMA has predicted that cost of goods and services will surpass the government estimates and inflation will be a direct consequence of increased GST rates. Even advocates of the tourism industry have expressed their concerns with respect to the government's plans to increase GST and TGST rates.
The advisory letter sent by MMA was kept confidential by the 19th Parliament Budget Committee Chairperson Mohamed Nashiz, however, it has now been publicized after heavy pressure from the Speaker of Parliament Mohamed Nasheed and Deputy Speaker of Parliament Eva Abdulla.