Thursday
25th Apr 2024
Dhivehi Edition
President Nasheed and President Solih. Photo: TMJ
The parliament has approved the bill proposed to increase taxes levied on goods and services and tourism goods and services.
The tax bill proposed by the government intended 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 amendment to the Goods and Services Tax Act proposed by the Member of Parliament for the Ihavandhoo constituency, Mohamed Shifau, on behalf of the government was approved, today, with a consensus of 55 MPs voting yes, to raise levied taxes.
Notably, amongst the 82 eligible voters present, 26 voted against the tax increase bill, while one MP refused to cast a vote.
According to speculation, the MPs who voted for the amendment bill belonged to the ruling faction of Maldives Democratic Party (MDP), loyal to the President Ibrahim Mohamed Solih. The members who voted against the bill included the President Mohamed Nasheed faction of MDP along with the government opposition coalition of PPM and PNC.
The parliament neglected warning calls of the central bank of Maldives, Maldives Monetary Authority (MMA) on the consequences of approving the Amendment to the tax Act.
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 unless serious attempts are made to reduce state expenses.
MMA 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.