The Parliament has begun the debate on the bill that has been submitted to amend the Income Tax Act, where it looks to include Tourism Goods and Services Tax (TGST) for tour operators and travel agents who serve tourists wanting to travel to Maldives.
North Kulhudhuffushi Constituency MP Mohamed Dawood submitted the bill on behalf of the government, with the purpose of the bill being to add GST regulations to the Income Tax Act for the services provided by offshore booking platforms, foreign tour operators and travel agents. The bill describes these changes as a way to solve the issues within the taxation system and to strengthen it.
If the bill is passed and tax imposed, it is estimated that the state will see an yearly increase of MVR 16 billion, which comes from the MVR 299.3 million from foreign travel agents and MVR 13 billion from foreign tour operators.
During today's debate at the Parliament sitting, People's National Congress (PNC) MPs said that the aim is to expand the tax base, and to procure rightful benefits for Maldivians from the financial benefits that come about from foreign parties that make use of Maldivian islands and lagoons.
"I believe that if the Parliament passes this amendment and brings it into force, we will see an end to the lack of benefits for Maldivians who do not see the rightful benefits they deserve which is coming from Maldivian resources being used," said Funadhoo Constituency MP Mohamed Mamdooh.
According to Mamdooh, the amendment will not see a tax increase and instead, will see an expansion to the tax base.
Some opposition Maldivian Democratic Party (MDP) MPs also said that imposing a tax upon offshore tour operators is required but, the actionable procedures need to be proper and looked into.
Kendhoo Constituency MP Mauroof Zakir spoke in support of the bill, but said that the bill must be passed after stating and discussing the effects of the bill to businesses.
Velidhoo Constituency MP Mohamed Abbas was the only one to express concerns during today's Parliament sitting.
Abbas, who is in the tourism business, said that even if there is no tax increase, the amendments in the bill will majorly shock the industry. He went on to say that this is not something where a decision can be reached just by debating on the Parliament floor and via a decision from the President's Office.
He said that the treaties Maldives is a part of and international business laws are to be taken into consideration, and that the bill should not be passed without the appropriate amount of time being taken.
