Ministry of Finance has said that that the tax hikes proposed in parliament today would result in the State earning an additional MVR 2.7 billion.
Ministry of Finance has said that that the tax hikes proposed in parliament today would result in the State earning an additional MVR 2.7 billion.
The ministry has decided to increase income via Airport Development Fee and Departure Tax by MVR 1.5 billion. The new amendments propose an increase in tax from all passengers except Maldivians travelling in economy class. For business class tickets, it is increased by 100 percent, with the fee increased to USD 120. Maldivians and foreigners travelling in first class will be charged USD 240, with USD 480 to be charged from those travelling on private jets.
Green tax is to be increased by 100 percent, with the Finance Ministry estimating that the State can earn MVR 964 million through this.
Finance Ministry further estimates that by increasing TGST by 1 percent, total yearly earnings can be raised to MVR 202 million.
With this, 40 percent of the increased income through tax hikes is from tourism.
These changes have been proposed to parliament today. If passed without changes, Finance Ministry estimates that this will present an increase of 2 percent of GDP to total State revenue.
- Airport Development Fee and Departure Tax: 1 December 2024
- Green Tax: 1 January 2025
- TGST: 1 June 2025
The government said that in bringing about changes to taxes, they prioritized ensuring that the effect on the public is minimal. In addition to this, the government is also taking several measures to bring down expenses. The Finance Ministry said that a timeline of implementation of these measures will be announced soon.
As per the current plans of the Finance Ministry, the major reform actions will be implemented from next year onwards. As such, targeted subsidies also will now be introduced next year although it was initially planned for the current year.
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