Raising the Goods and Services Tax (GST) rate and the Tourism Goods and Services Tax (T-GST) rate will not have a negative impact, says Spokesperson at the President's Office Miuvan Mohamed.
President Ibrahim Mohamed Solih on Tuesday, ratified the sixth amendment bill to the Goods and Services Tax Act, seeking 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 six to eight percent 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.
Speaking at the Press Conference held on Thursday, President's Office's Spokesperson stated that changes were brought to the tax rates after consulting relevant government institutions, businesses and industry stakeholders. He also stated that advice of international monetary agencies were taken into consideration while making the decision.
Highlighting that the raise in GST and TGST will not have a negative impact, Miuvan stated that relevant stakeholders and experts agrees to this. He said that this decision was made to enhance the tourism industry and the whole economy of Maldives.
Miuvan went on to say that the most important step that can be taken to rectify the government reserve is enhancing the revenue earned as foreign currency.
Miuvan also said that even though the inflation rate of Maldives is set to increase to 5.5 percent with the increase in GST, this is still less than the inflation rates of neighboring countries.