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Discussions for TGST and GST rate hike commence

Mohamed Rehan
03 July 2022, MVT 20:58
Minister of Finance Mr. Ibrahim Ameer (L) along with his cabinet colleague Minister of Economic Development Mr. Fayyaz Ismail at Parliament Committee meeting-- Photo: Mihaaru
Mohamed Rehan
03 July 2022, MVT 20:58

State commences official discussions towards hiking the Tourism Goods and Services Tax (TGST) and Goods and Services Tax (GST) tax rates in light of global economic crisis.

Ministry of Finance had announced that the state is holding several discussions with stakeholders to assess and seek opinion and feedback towards the planned decision. According to the Ministry, the discussions will contribute to the mid-term fiscal strategy.

Although the ministry has disclosed discussions on the planned rate hike for TGST and GGST, the ministry had not specified the nature of rate hikes or the date of implementation.

The ministry announced that all stakeholder feedback and opinion will be factored in before it moves ahead with an eventual decision.

The President of Maldives Association of Travel Agents and Tour Operators (MATATO) Abdulla Giyas, who took part in one of these discussions, said that the ministry proposed to hike both TGST and GST effective from January 2023.

The proposed bump include an increment of TGST from 12 to 16 percent and GST from 6 to 8 percent.

Giyas said that it is very important to give the tourism sector at least a year to prepare it for such a change. He also highlighted on the impact of the decision on guesthouses and safari vessels.

Giyas stated that the association is attempting to survey and compile information of potential damages in light of tax rate hikes on the tourism sector.

Goods and Services Tax (GST) was first implemented in 2011 through the Maldives Tax Act.

Initially, state levied TGST at a rate of 3.5 percent which surged to 6 percent in 2012, after which the tax rate was further bumped to a rate of 12 percent in 2014.

On the other hand, GST started at 3 percent which was incremented to 6 percent and has remained unchanged.

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