Ruling People's National Congress (PNC) Parliamentary Group Leader Ibrahim Falah has said that raising TGST is a vital action that needs to be taken at this time even if it is met with disapproval from resort owners and other business persons.
Ruling People's National Congress (PNC) Parliamentary Group Leader Ibrahim Falah has said that raising TGST is a vital action that needs to be taken at this time even if it is met with disapproval from resort owners and other business persons.
Falah made these comments while speaking in parliament today in the debate on the bill of amendment to GST Act.
His comments were in response to a statement by owner of Sun Travels and MP for Meedhoo Ahmed Siyam, who raised concerns that raising the tax annually could lead to the country's financial ruin.
Falah said that although the decision to raise taxes does not appeal to businesses, it is still a minimal increment when taking into consideration all the concessions made by the government for business persons.
As such, Falah pointed out that loans taken with sovereign guarantees for investing in tourism would have been taken at very low interest rates. He said that the government 'mortgages the entire population' in providing these guarantees, which leads to businesses being able to make major profits.
Previous administrations have provided sovereign guarantees for Siyam to take loans to develop some of his resorts. However, last August, the current administration said that it could not provide a sovereign guarantee for Siyam to take a loan of USD 165 million (MVR 2.5 billion).
Falah said that in reality, businesses that are begun in this way also do not provide ample opportunities to the public. Were they to offer competitive salaries and offer opportunities, the burden on the State would be lessened, he said.
Siyam also said that the tax being charged in Maldives is higher than that of developed countries, to which Falah retorted that even by international standards, the taxes charged in tourism in Maldives is low.
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