The Parliamentary Committee of the Whole House has begun evaluating the government-proposed amendment bill to increase taxes in 2023.
Members of the whole house committee discussed holding meetings with the relevant authorities and experts from various industries. They also highlighted the importance of collecting data on the current global economic situation and the changes in the Maldivian economy, adding that the public should be informed on the potential impact of introducing tax hikes.
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. He said it was crucial to address the concerns of the other parliamentarians by determining the impact the amendments would have on the country’s economy. He proposed that a sub-committee be formed to evaluate the bill, with members of the Parliamentary Committee on Economic Affairs and the whole house committee.
The finance ministry 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. As such, the government will be decreasing expenditure and implementing a variety of measures to increase state revenue, including increasing TGST from 12% to 16% and increasing GST from 6% to 8%. The changes are proposed to be implemented in January 2023. The ministry estimates that the tax hikes will increase the yearly state revenue by USD194 million, which would benefit the state and its citizens.