Nasheed: Decision on tax hike will be made with expert advice, regardless of whipline

Parliament Speaker, former President Mohamed Nasheed presides over a parliamentary sitting. (Photo/People's Majlis)

A decision regarding the bill submitted by the government to increase Goods and Service Tax (GST) and Tourism Goods and Service Tax (TGST) will be taken after seeking advice from experts, states Parliament Speaker, former President Mohamed Nasheed.

The government is pushing to raise the GST from 6 percent to 8 percent, and the TGST from 12 percent to 16 percent.

The bill, sponsored by Ihavandhoo MP Mohamed Shifau, is currently being reviewed by the Whole-House Committee.

Nasheed’s remark comes after Maldivian Democratic Party (MDP)’s parliamentary group passed a three-line whip last week to pass the bill without revision.

Chairing a meeting of the Whole-House Committee on Tuesday, Nasheed said a decision regarding the bill will be made after summoning experts to the Parliament and clarifying information.

Nasheed said parliamentary procedure requires three readings of the bill. The first reading is held on the parliamentary floor and involves all MPs.

“The second reading is the committee work. This is when the committee has the opportunity to summon relevant experts and question them and clarify facts before making a decision. So, I will get it done when the time comes. I will bring in relevant experts here,” he said.

Nasheed said the committee will compile its report after that, which will be presented to the floor for a vote.

Nasheed said he will uphold democratic procedures.

“I cannot fail to summon relevant experts here and remain passive and let it happen the way some politicians want, at a time when all Maldivian people want to share their opinion regarding this,” he said.

Nasheed’s decision was welcomed by his supporters within the deeply divided MDP, while MPs aligned with President Ibrahim Mohamed Solih argued the bill must be passed intact.

Finance Minister Ibrahim Ameer, who attended the Parliament to answer questions Monday, told MPs that failure to raise the tax rates will stop economic growth.

Ameer said that while Maldives has managed to rebound from the COVID-19 pandemic, expenditures continue to mount and the country faces more threats – such as the Russia-Ukraine war.

He said the failure to increase income will halt multiple projects.

“What happens then is the economic growth rate drops further. It is my sincere appeal to pass the bill on GST and TGST as it is,” he said.

Those opposed to a tax hike argue the government should instead cut unnecessary expenditure, such as the appointment of people to political posts.