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Taxing plastic bags may lead to inflation: MMA

Lamya Abdulla
15 November 2021, MVT 14:05
(FILE) Plastic bags to be used in marine vessels for passengers that may get sea sick. photo taken on August 26, 2019: implementing a tax of MVR 2 per plastic bag by the middle of 2022 is projected to generate a revenue of MVR 48 million for the state next year. -- Photo: Nishan Ali / Mihaaru
Lamya Abdulla
15 November 2021, MVT 14:05

Maldives Monetary Authority (MMA) said on Sunday that taxing plastic bags may lead to inflation in 2022.

According to MMA's recommendation on the state budget for 2022, the inflation rate of Maldives will be at 1.1 percent next year. However, the introduction of taxes on plastic bags by the middle of next year may lead to a further increase in inflation, they said.

MMA did not specify how much of an increase this would lead to.

The state budget has said if the tax of MVR 2 per plastic bag is implemented, the government will generate a revenue of MVR 48 million.

It has not yet been decided how this tax will be applied. It is unclear whether the tax would be charged by the importer or the retailers.

The implementation of minimum wage next year may also lead to an increase in inflation rates, MMA said.

Governor of MMA said at the Parliamentary Committee researching the state budget next year that the minimum wage would have a significant impact on Maldives' economy. A thorough study on the private sector is required to understand how it would affect the economy, MMA said.

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