President ratifies sixth amendment bill to the Goods and Services Tax Act
Minister of Finance announced the government decision to increase the GST and TGST on July 05
President Ibrahim Mohamed Solih
President Ibrahim Mohamed Solih has ratified the sixth amendment bill to the Goods and Services Tax Act.
President Solih ratified the amendment bill on Tuesday.
The law was enacted by Parliament following lengthy debates on the amendments proposed by the administration, at its 39th sitting of the third session, held on Wednesday, November 16, 2022.
The amendment seeks to increase state revenue, following fiscal strategy forecasts that indicate the requirement for measures to accommodate recurring expenditures amidst volatile changes to the global economy.
The amendment raises the Goods and Services Tax (GST) rate from 6 to 8 per cent and the Tourism Goods and Services Tax (T-GST) rate from 12 to 16 per cent.
The change will take effect on January 1, 2023. Following ratification, the law was published in the Government Gazette.
Minister of Finance Ibrahim Ameer announced the government decision to increase the Goods and Services Tax (GST) and Tourism Goods and Services Tax (TGST) on July 05, 2022.
Minister Ameer stated that the government had decided on fiscal anchors to maintain the fiscal state at a sustainable level. Highlighting the changes occurring in the global economy, Minister Ameer stated that measures need to be taken to sustain the country's fiscal state at a sustainable level. He noted increase in prices of goods in the global market and hike in the interest rates of loans in major economies is boosting debt.
As such, the Minister stated that the government has made the decision to take additional measures in order to decrease state expenditure and increase state revenue. Increasing the GST and TGST percentage came as part of these measures.
