Deputy Speaker of Parliament MP Eva Abdulla, on Monday voiced her belief now is an apt time for the imposition of income tax.
Speaking on ruling Maldivian Democratic Party (MDP)’s motion on government’s proposed stimulus package to mitigate COVID-19's ensuing economic slowdown, Eva said that as income tax applied to individuals earning over MVR 60,000, the hour was fitting for the wealthy to contribute to the state.
The sitting was the first held since parliamentary sessions were cancelled as a precautionary social distancing measure, and was conducted via teleconferencing during the world’s first fully digitalized parliamentary sitting.
“Now is the time when the wealthy should spare some for the state", she said.
MP Eva also stressed the importance of setting up a monitoring mechanism by which the government can ensure businesses receiving funds from the proposed stimulus package comply with the condition of retaining employees during the COVID19 crisis.
“We know that we cannot depend on tourism forever,” Eva further stated, stressing the need for economic diversification and exploration into other industries such as fisheries, shipping and agriculture.
Opposition People’s National Congress MP Mohamed Saeed rebutted Eva’s comments in a tweet in which he described the call for the imposition of the income tax during “economically derailing times” as “the biggest mistake”.
Such a move would eliminate many jobs, he further cautioned.
According to the Income Tax Act which will come into effect on first of April, 2020, 5.5 percent and 8 percent will be charged as income tax from individuals receiving an income between MVR60,000-100,000 and MVR 100,000-150,000, respectively.
Further, Individuals receiving MVR150,000-200,000 and MVR200,000 above will be imposed an income of 12 percent and 15 percent respectively.
Meanwhile, President Ibrahim Mohamed Solih recently revealed that the government were to lose between USD 135.9 million (MVR 2.5 billion) and USD 446.6 million (MVR 6.9 billion) in state revenue this year under current circumstances amidst the COVID-19 outbreak in the country.
Furthermore measures to counteract the estimated losses include the cabinet's decision to cut MVR 1 billion in state costs and close government offices from March 19 to April 2. The parliament had also approved a 20 percent cut on parliamentarian's salaries.