MATI expresses concern over government tax policies

Maldives Association of Tourism Industry (MATI) has expressed concerns over the tax policies of the government, saying that government decision to introduce a package of various taxes suddenly and once could hurt the economy, and especially the tourism industry.

Speaking to Sun today, Ibrahim “Sim” Mohamed, the Secretary General of MATI said that the government had been considering an increase of Tourism General Sales Tax (TGST) from 3.5 per cent to 6 per cent next year, and from 6 percent to 10 percent the following year and that introducing income tax in addition to TGST and trade profit tax would considerably harm the tourism industry.

Sim said that every kind of businesses run in the Maldives were very much interconnected with tourism and that as a result any tax levied on any kind of business would affect the tourism industry. He also said that the government’s decision to introduce income tax next year in order to eliminate government budget deficit would hurt businesses all over the country.

Sim also said that MATI had no objection to taxation in principle, and that they were concerned about the sudden introduction of a number of taxes. He said that such policies would “frustrate traders”.

Sim noted taxing highly-paid expatriate workers in the tourism industry separately, after levying income tax, would double tax impositions on them, and that this would create further challenges.

Sim said that MATI discussed People’s Majlis Standing Committees over tax bills, and that Members of Parliament should consider the repercussions of introducing various taxes and try to weigh benefits with harms of such taxes in order to decide what the consequences might be.