President Ibrahim Mohamed Solih ratified the government-proposed amendment approved by the parliament, 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, with a consensus of 55 MPs voting yes, to raise levied taxes.
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.
Furthermore, upon completion of a survey conducted by Maldives Association of Travel and Tour Operators (MATATO) in collaboration with over 300 international tour operators and travel agents, MATATO stated that increasing TGST will cause the country to lose at least 10 percent of its tourists next year.
While the cost of goods has continued to inflate within the global markets, members belonging to the President Mohamed Nasheed faction of MDP argued against the tax amendment along with the government opposition coalition of PPM and PNC.
MPs who voted for the amendment bill belonged to the ruling faction of Maldives Democratic Party (MDP), loyal to the President Ibrahim Mohamed Solih.