The President’s Office has stated countries that had reduced their taxes to appease the public had to bear the negative economic consequences.
Speaking at a press conference, the Spokesperson at the President’s Office Miuvaan Mohamed said the Maldivian economy is stable and the government is able to manage its debt but that the government also needs to plan for the long-term costs of the major development projects. He said neighbouring countries have faced economic turmoil after reducing taxes to appease the public, adding that the tax hikes will not impact citizens and will benefit them in the long term. He acknowledged that hiking taxes is a contentious topic and no one wants to advocate for it. He, however, said that increasing taxes will increase state revenue and that the plan was formulated with recommendations of experts from the International Monetary Fund (IMF) and the World Bank.
The government has proposed an amendment bill to increase Tourism Goods and Services Tax (TGST) from 12% to 16% and increase the Goods and Services Tax (GST) from 6% to 8% in 2023.