The Government of the Maldives has stated the decision to increase taxes is challenging, but the change is being brought for the benefit of the citizens.
Speaking to PSM News, Parliamentarian Ahmed Abdulla, the Deputy Chairperson of Finance of the main ruling Maldivian Democratic Party (MDP), said the government will always give priority to making decisions in the interest of the people in accordance with the latest findings of the international financial institutions. He said the government will put the interests of the citizens first although hiking taxes is a difficult decision for the government from a political point of view. He also said inflation rates are not rising in the Maldives because of government subsidies.
Parliamentarian Mohamed Shifau proposed the Bill on Amendment to the Goods and Services Tax Act on behalf of the government to increase the Goods and Services Tax (GST) and Tourism Goods and Services Tax (TGST) in an effort to increase state revenue. The bill was accepted and sent to the Parliamentary Committee of the Whole House for evaluation.
The Ministry of Finance stated the tax hikes will increase the yearly state revenue by USD194 million and will benefit the state and its citizens. The ministry also stated the government decided to implement tax hikes in response to changes in the global market and in accordance with the current economic situation, which threatens to become worse if no measures are taken.